Are there gender-based reasons for current account imbalances?

An interesting new paper from Columbia University investigates the link between the growing surplus of men relative to women in countries such as China and current account surpluses, which are acknowledged as having contributed to the current financial crisis. The paper demonstrates that countries with a higher sex ratio also tend to have a higher private sector current account to GDP ratio. It finds that when sex ratios are out of balance - as is happening in China - obtaining a marriage partner becomes less assured, leading men to save more. The result is a higher savings rate and a larger current account surplus. Global ramifications of these trends could be large - for example, when the sex ratio rises, the global interest rate becomes lower!

A sexually unbalanced model of current account imbalances

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