Victory or repudiation?
Subtitle: the probability of the Southern Confederacy winning the Civil War
By: Marc D. Weidenmier, Kim Oosterlinck.
Contributors: Oosterlinck, Kim.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 13567.; Working paper series (National Bureau of Economic Research) -- working paper no. 13567.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 23
Subjects: United States -- History -- Civil War, 1861-1865 -- Economic aspects
Description: Historians have long wondered whether the Southern Confederacy had a realistic chance at winning the American Civil War. We provide some quantitative evidence on this question by introducing a new methodology for estimating the probability of winning a civil war or revolution based on decisions in financial markets. Using a unique dataset of Confederate gold bonds in Amsterdam, we apply this methodology to estimate the probability of a Southern victory from the summer of 1863 until the end of the war. Our results suggest that European investors gave the Confederacy approximately a 42 percent chance of victory prior to the battle of Gettysburg/Vicksburg. News of the severity of the two rebel defeats led to a sell-off in Confederate bonds. By the end of 1863, the probability of a Southern victory fell to about 15 percent. Confederate victory prospects generally decreased for the remainder of the war. The analysis also suggests that McClellan's possible election as U.S. President on a peace party platform as well as Confederate military victories in 1864 did little to reverse the market's assessment that the South would probably lose the Civil War.
Notes: "November 2007"

Includes bibliographical references (p. 20-22).

Also available in PDF from the NBER world wide web site (www.nber.org).