Abstract:

In the context of population aging, the life cycle characteristics of individual economic behaviors accumulate and enlarge rapidly, resulting in significant macroeconomic effects and policy adjustment pressure. Focusing on the potential link between population aging and monetary policy interest rate channel and credit channel and introducing life cycle thought into the IS-LM model and CC-LM model, this paper argues that population aging tends to weaken the credit channel of monetary policy, but its impact on the interest rate channel is uncertain and asymmetric. Further, using quarterly data from 1992 to 2019, an empirical analysis through the time-varying parameter vector autoregressive (TVP-SV-VAR) model and the polynomial distributed lag (PDL) model indicates that population aging has weakened Chinese monetary policy credit channel, but the impact on interest rates channels has not yet appeared. The implications of the above research are as follows: The government should promote the transformation of the monetary policy model from quantitative to price-based, smooth the interest rate channel and the credit channel of monetary policy, slow down the pace of population aging, and attach importance to the development of the aging industry.

Key words: population aging, monetary policy, interest rate transmission channel, credit transmission channel, life cycle