NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

A Sexually Unbalanced Model of Current Account Imbalances

Qingyuan Du, Shang-Jin Wei

NBER Working Paper No. 16000
Issued in May 2010
NBER Program(s):International Finance and Macroeconomics

Large savings and current account surpluses by China and other countries are said to be a contributor to the global current account imbalances and possibly to the recent global financial crisis. This paper proposes a theory of excess savings based on a major, albeit insufficiently recognized by macroeconomists, transformation in many of these societies, namely, a steady increase in the surplus of men relative to women. We construct an OLG model with two sexes and a desire to marry. We show conditions under which an intensified competition in the marriage market can induce men to raise their savings rate, and produce a rise in the aggregate savings and current account surplus. This effect is economically significant if the biological desire to have a partner of the opposite sex is strong. A calibration of the model suggests that this factor could generate economically significant current account responses, or more than 1/2 of the actual current account imbalances observed in the data.

download in pdf format
   (459 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w16000

Users who downloaded this paper also downloaded* these:
Wei, Zhang, and Liu w18000 Status Competition and Housing Prices
Du and Wei w16788 A Darwinian Perspective on "Exchange Rate Undervaluation"
Bayoumi, Tong, and Wei w16432 The Chinese Corporate Savings Puzzle: A Firm-level Cross-country Perspective
Wei and Zhang w16800 Sex Ratios, Entrepreneurship, and Economic Growth in the People's Republic of China
Wei and Zhang w15093 The Competitive Saving Motive: Evidence from Rising Sex Ratios and Savings Rates in China
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us