3. High callability ratios lead to lower unemployment rates and higher incomes. These variables are particularly important because they are close local analogs to the Fed’s dual mandate to promote maximum employment and stable prices. (7/N)

2. High callability ratios lead to more spending, particularly in capital outlays, and less interest expenses. (6/N)

So, what do we find? Using an event study of local governments around 2008-2013 that vary in the dollar fraction of their debt becoming callable (callability ratio), our three main findings are:

1. High callability ratios lead to more bond issuance! (5/N)