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Comment: Betting on Secession: Quantifying Political Events Surrounding Slavery and the Civil War

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  • Paul Hallwood

    (University of Connecticut)

Abstract

This paper argues that falling slave prices in the earliest months of the American Civil War in April 1861 indicates lack of confidence in the durability of the Confederacy. The key to this understanding is use of an asset pricing model that distinguishes between the expected outcomes of the war, whether the war was thought to be over quickly or otherwise, and whether any compensation for emancipation would be paid. This view concurs with other investigators who have examined falling gold bond and cotton bond prices and, in the very early months, rising Confederate dollar prices of gold, as well as difficulties in selling Confederate bonds to finance its war effort.

Suggested Citation

  • Paul Hallwood, 2017. "Comment: Betting on Secession: Quantifying Political Events Surrounding Slavery and the Civil War," Working papers 2017-07, University of Connecticut, Department of Economics.
    • Handle: RePEc:uct:uconnp:2017-07
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    References listed on IDEAS

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    1. Marc D. Weidenmier & Kim Oosterlinck, 2007. "Victory or Repudiation? The Probability of the Southern Confederacy Winning the Civil War," NBER Working Papers 13567, National Bureau of Economic Research, Inc.
    2. Charles W. Calomiris & Jonathan Pritchett, 2016. "Betting on Secession: Quantifying Political Events Surrounding Slavery and the Civil War," American Economic Review, American Economic Association, vol. 106(1), pages 1-23, January.
    3. Merrick Jr., John J., 2001. "Crisis dynamics of implied default recovery ratios: Evidence from Russia and Argentina," Journal of Banking & Finance, Elsevier, vol. 25(10), pages 1921-1939, October.
    4. Weidenmier, Marc D., 2000. "The Market for Confederate Cotton Bonds," Explorations in Economic History, Elsevier, vol. 37(1), pages 76-97, January.
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    Cited by:

    1. Lacroix, Jean & Mitchener, Kris & Oosterlinck, Kim, 2023. "Domino Secessions: Evidence from the U.S," CEPR Discussion Papers 18377, C.E.P.R. Discussion Papers.
    2. Paul Hallwood, 2018. "The Confederacy and the American Civil War, 1861-1865: Greed Or Grievance?," Working papers 2018-18, University of Connecticut, Department of Economics.

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    More about this item

    Keywords

    Confederacy; default risk; secession; slavery; US Civil War;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • N31 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: Pre-1913
    • N41 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: Pre-1913

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