The award for strangest financial research paper of the day is a shoo-in:
We use a quinquennial data set covering 87 countries between 1975 and
2005 to investigate the relationship between fertility and the real
effective exchange rate. Theoretically a country experiencing a decline
in its fertility rate can be expected to have higher savings, lower
investment, a current account surplus, and accordingly a real
depreciation. We test and confirm this hypothesis, controlling for a
host of potential determinants such as PPP deviations and the
Balassa-Samuelson effect. We find a statistically significant and
robust link between fertility and the exchange rate. Our point-estimate
is that a decline in the fertility rate of one child per woman is
associated with a depreciation of approximately .15% in the real
effective exchange rate.
[via NBER]
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