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How Much Does Political Uncertainty Matter? The Case of Louisiana Under Huey Long

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  • Gabriel P. Mathy
  • Nicholas L. Ziebarth

Abstract

We study the role of political uncertainty on economic outcomes using the case of Huey Long's tenure as governor of Louisiana during the Great Depression. We construct two well-established measures of uncertainty specifically for Louisiana using primary sources: stock price volatility and newspaper mentions of uncertainty. Combining these uncertainty measures with employment data from the Census of Manufactures, we attempt to identify the effects of political uncertainty using the state of Mississippi as a control group. We find limited evidence for the significance of political uncertainty in a standard differences-in-differences framework, even when restricting our attention to border counties. Finally, we conduct an event study on the unexpected assassination of Long in September 1935, and again we find no effect on employment. We conclude that whatever political uncertainty was attributable to Huey Long mattered very little for economic outcomes.

Suggested Citation

  • Gabriel P. Mathy & Nicholas L. Ziebarth, 2014. "How Much Does Political Uncertainty Matter? The Case of Louisiana Under Huey Long," Working Papers 2014-06, American University, Department of Economics.
  • Handle: RePEc:amu:wpaper:2014-06
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    Cited by:

    1. Miguel Morin, 2015. "The Labor Market Consequences of Electricity Adoption: Concrete Evidence from the Great Depression," Cambridge Working Papers in Economics 1554, Faculty of Economics, University of Cambridge.
    2. Lennard, Jason, 2018. "Uncertainty and the Great Slump," Lund Papers in Economic History 170, Lund University, Department of Economic History.
    3. Christian Pierdzioch & Rangan Gupta, 2017. "Uncertainty and Forecasts of U.S. Recessions," Working Papers 201732, University of Pretoria, Department of Economics.
    4. repec:ceh:journl:y:2017:v:2:p:9-34 is not listed on IDEAS
    5. Jalil, Andrew J. & Rua, Gisela, 2016. "Inflation expectations and recovery in spring 1933," Explorations in Economic History, Elsevier, vol. 62(C), pages 26-50.
    6. Nicolas L. Ziebarth, 2015. "The Great Depression Through the Eyes of the Census of Manufactures," Historical Methods: A Journal of Quantitative and Interdisciplinary History, Taylor & Francis Journals, vol. 48(4), pages 185-194, October.

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