Friday, July 29, 2011

The sex ratio and the real exchange rate

Thanks to EconBrowser for finding this paper on sex ratios and exchange rates and on China in particular. The authors argue that an unbalanced sex ratio favoring men tends to depreciate a country's real exchange rate by raising saving rates and by increasing labor supply, if nontradables are more labor intensive. I think the argument for both those channels hinges on men's needs to accumulate more resources to compete for scarcer women.