How China's Boy Boom Hurt US Economy

Preference for boys may lead to 'savings glut'
By Matt Cantor,  Newser Staff
Posted Jun 19, 2009 1:47 PM CDT
How China's Boy Boom Hurt US Economy
A mother and a son look at toys at a department store in Shanghai, China.    (AP Photo)

Lots of theories have been floated about the how the US housing and credit bubbles came to be, but this one gets points for originality: New research suggests that China's overabundance of males played a role, reports the Wall Street Journal. It begins with this: Because of the high male-to-female ratio, Chinese families with boys tend to save more money to give their sons an edge in the bridal hunt.

That contributes to China as a whole saving more than the US and in turn to the "global savings glut" identified by Ben Bernanke in 2005. This savings imbalance between the US and developing nations helped pushed down interest rates here. "Other economies known to have a strong sex ratio imbalance include Korea, Taiwan, Hong Kong, Singapore, and India," say two economists in a new paper. "These countries also happen to have high savings rates.” (More China stories.)

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