TY  - JOUR
AU  - Du,Qingyuan
AU  - Wei,Shang-Jin
TI  - A Sexually Unbalanced Model of Current Account Imbalances
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16000
PY  - 2010
Y2  - May 2010
UR  - http://www.nber.org/papers/w16000
L1  - http://www.nber.org/papers/w16000.pdf
N1  - Author contact info:
Qingyuan Du
Economics Department
Monash University
Melburne, Australia
E-Mail: qingyuandu@gmail.com

Shang-Jin Wei
Graduate School of Business
Columbia University
Uris Hall 619
3022 Broadway
New York, NY 10027-6902
Tel: 212/854-9139
E-Mail: shangjin.wei@columbia.edu
AB  - 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.
ER  -