FRANK K. REILLY, PH.D., CFA
Bernard J. Hank Professor of FinanceUniversity of Notre Dame
DAVID J. WRIGHT, PH.D.
Professor of FinanceUniversity of Wisconsin–Parkside
The value of nonmunicipal bonds outstanding in the United States at over $8 trillion is fairly close to the combined value of equity in the United States, and a similar comparison holds for world capital markets, where the value of fixed income securities is typically similar to the total value of equity. The only instance where this capital comparison does not hold is in some emerging-market countries, where the bond markets have not yet developed. Given the economic importance of fixed income markets, it is difficult to understand why there has not ...