01825cas a2200253 a 4500 AALejournalIMF002844 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451851205 1018-5941 BD-DhAAL BD-DhAAL Goldstein, Morris. Market-Based Fiscal Discipline in Monetary Unions : Evidence From the U.S. Municipal Bond Market / Morris Goldstein, Geoffrey Woglom. Washington, D.C. : International Monetary Fund, 1991. 1 online resource (40 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The concept of market-based fiscal discipline posits that a government which runs persistent, excessive fiscal deficits will face an increased cost of borrowing and eventually, a reduced availability of credit, and that these market actions will provide an incentive to correct irresponsible fiscal behavior. This paper presents new empirical evidence on market-based fiscal discipline by estimating the relationship between the cost of borrowing and fiscal policy behavior across U.S. states. We find that U.S. states which have followed more prudent fiscal policies are perceived by the market as having lower default risk and are therefore able to reap the benefit of lower borrowing costs. Mode of access: Internet Woglom, Geoffrey. IMF Working Papers; Working Paper ; No. 1991/089 Full text available on IMF http://elibrary.imf.org/view/journals/001/1991/089/001.1991.issue-089-en.xml IMF e-Library