KU News Release

Politics and bond market study by KU doctoral student wins national award

LAWRENCE — A University of Kansas doctoral student in public administration who is a career Army officer won a national award for his study of the effects of political information on the municipal bond market.

U.S. Army Col. Robert Kennedy Nye of Carlisle, Pa., received the 2007 Mike Curro Best Student Paper Award from the Association for Budgeting and Financial Management at its Oct. 25-27 convention in Washington, D.C.

Nye plans to receive his doctorate from KU in 2008. He is writing his dissertation while teaching at the U.S. Army War College in Carlisle.

In addition to receiving a monetary award and commemorative plaque, Nye joined a panel discussion at the conference that focused on his paper, “Non-Market Information, Market Efficiency and Municipal Bond Pricing.” His study examined recent California elections to determine if political information affected the municipal bond market.

“The 2003 recall election and 2004 special election provided a good setting for this study because Arnold Schwarzenegger ran on a clear promise to balance California’s budget and improve infrastructure which required borrowing money,” Nye said. “Investors who bought California bonds prior these elections stood to lose money if the market was flooded with new bonds carrying higher interest rates. Scholars disagree on whether investors respond to these sorts of developments.

“My findings suggest that political information does affect the municipal bond market, and that both municipal bond investors and government officials preparing to issue bonds into the market should be aware of political events when making investment decisions.”

One of the judges praised Nye’s work as “a wonderfully developed and executed piece of research.”

“While the results are noteworthy for what they reveal regarding such theory, they are also helpful in pointing to future research that integrates public finance, economic as well as behavioral interpretations of investor actions, ” the judge wrote.

Nye said he has gathered data that would allow him to continue his study of the California bond market by looking at the state’s special election of 2005 and gubernatorial election of 2006.

Nye conducted his study for graduate courses taught by Justin Marlowe and Michael Moody, both assistant professors of public administration at KU. In addition, interns in the Bloomberg Student Lab and Catherine Shenoy, KU assistant professor of business, assisted with data requests for his study.

Nye’s 24 years with the U.S. Army include service in Kosovo and Afghanistan. He commanded an infantry battalion deployed to support United Nations peacekeeping efforts in Kosovo and was chief of current operations for the Combined Joint Task Force in Afghanistan while assigned to the 10th Mountain Division, Fort Drum, N.Y.

Originally from Tucson, Ariz., Nye earned a bachelor’s degree from University of Arizona in 1983 and a master’s in public administration from the Cornell University Institute of Public Affairs in 1998. He received a master’s degree in strategic studies from the Army War College in 2005. He volunteered for the Army War College doctoral program, which selects one or two students a year to pursue doctoral studies for two years and then return to the Army War College faculty to complete dissertation work and teach.

He is the son of Althea Nye of Lakeland, Fla.

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