J’accuse! Antisemitism and Financial Markets in the Time of the Dreyfus Affair

Abstract : This paper studies discrimination in financial markets in the context of the "Dreyfus Affair" in 19th century France. We analyze the market performance of firms with Jewish board members. Building on empirical evidence and a model with antisemitic and unbiased agents, we show how investors betting on firms with Jewish connections earned higher returns during the media campaign organized to rehabilitate Dreyfus, the Jewish officer at the center of the Affair. Our paper provides novel evidence that discrimination can affect stock prices and create rents for some market participants. While these rents may attract betting against discriminators, the uncertainty surrounding discriminatory beliefs can limit the extent of arbitrage and allow discrimination to survive in the long run.

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Whistle the Racist Dogs: Political Campaigns and Police Stops

Abstract : Did Trump rallies aggravate anti-Black racism? Using data from nearly 12 million traffic stops, we show that the probability that a police officer stops a Black driver increases by 5.1% after a Trump rally during his 2015-2016 campaign. The effect is immediate, specific to Black drivers, lasts for up to 50 days after the rally, and is not due to changes in drivers' behavior. The effects are significantly larger among racially biased officers, in areas with more racist attitudes today, that experienced more racial violence during the Jim Crow era, or that relied more heavily on slavery. Results from a 2016 online experiment show that Trump's inflammatory campaign speech, although not explicitly mentioning Black people, specifically aggravated respondents' prejudice that Black people are violent. We find that the same words also increase the effect of a Trump rally among racially biased officers. We take this as evidence that although not explicitly anti-Black, Trump's campaign radicalized racial prejudice against Black people -- through a phenomenon known as dog-whistling -- and the expression of such prejudice in a critical and potentially violent dimension: police behavior.

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Narratives for Racial Violence in the Postbellum South

Abstract : We study how narratives for racial violence develop and persist in the postbellum US South, where racial mixing was socially taboo and legally prohibited. We posit that after the Civil War, social anxiety about racial mixing is heightened in places with more missing white men, lowering the cost of violence accompanied by narratives that depict Black men as sexual predators. We test this prediction by constructing a novel database of lynchings, which we combine with publicly available information to form a comprehensive dataset of anti-Black violence from 1865-1930. We find that from 1865 to 1880, the probability of a lynching for a sexual offense is 37 percent higher in counties that experienced the average shock to white male casualties. The effect persists and is exacerbated in times of economic downturn. We perform a series of robustness checks, which confirm that the results are not confounded by crime, migration, or other economic impacts of the war. Our findings have important implications for understanding how narratives for racial violence develop and persist, and further elucidate the prevalence of social anxiety around Black male sexuality in the postbellum US, a sentiment that endures today.

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