A sexually unbalanced model of current account imbalances
By: Qingyuan Du, Shang-Jin Wei
Contributors: Wei, Shang-Jin; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16000; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16000.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "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"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 5/27/2010.

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