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Authors:

• Shing-Jin WEI
  Columbia University

• Qingyuan Du
  Columbia University

Large current account surpluses by China and other countries are said to be a contributor to the low global interest rates and possibly to the recent global .financial crisis. This paper proposes a theory of excess savings based on a major, albeit silent, 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. A calibration of the model suggests that this factor could generate economically significant current account responses, or about 1/2 of the actual current account imbalances observed in the data.