| Monetary policy is an essential means for implementing macro-economic control.In Japan,after the collapse of asset price bubble,the Bank of Japan began to cut the policy rate(discount rate)from 6.0% in 1991 to 0.5% in 1995 rapidly,and accessed to a veritable low interest rate period,next the Zero Interest Rate Policy(ZIRP)in February 1999 and the Quantitative Easing Policy(QEP)in March 2001 were launched successively,as economic conditions improved,the Bank of Japan withdrew from QEP in March 2006 formally,and plans to reduce the current account balance gradually until it reaches the amount of legal reserve.Regrettably,under the effect of 2008 global financial crisis and European sovereign debt crisis,the Japanese economy was in jail once again.Quantitative Easing Policy also resurrected in October 2010,and the easing efforts were further strengthened,like Comprehensive Monetary Easing Policy has been strengthened 8 times from 2010 to 2012.After 2013,with the advent of "Abenomics",policies such as Quantitative and Qualitative Easing,Price Stability Target,Negative Interest Rate,Yield Curve Control and Forward Guidance turned out.Nevertheless,in stark contrast to the normalization of monetary easing,there is a lack of "prosperity" regardless of the "Koizumi economy"(January 2002 to October 2006)or the "Abe economy"(December 2012 to August 2020),and the long-term downturn and chronic recession are still the basic tone,which shows that the effect of monetary policy is not satisfactory.In the process,the age structure of Japan's population has also changed greatly: the population of young people aged 0-14 has shrunk sharply,the labor force aged 15-64 has begun to grow negatively since the 1990 s and the population of elderly people over 65 has rapidly increased,it has evolved to aging evolution gradually.Based on this,a very important question is: Is there any inherent relationship between the aging of the population and the weakening of the effect of monetary policy? This is exactly the subject of this article.However,the existing literature on this topic is still in its infancy,there are still many areas need to supplemented and improved in research methods,research contents and policy recommendations.Guided by these issues and starting from the practice of monetary policy regulation in Japan,the second chapter reviews the main measures taken by the Bank of Japan to fight against economic recession and deflation based on the time axis,and has conducted a detailed review of their basic effects,the consensus is that although monetary easing has achieved certain results,it has not anchored inflation expectations and promoted economic growth.Next,this article summarizes the main influence of population aging on the effect of monetary policy from three aspects: monetary policy space,monetary policy transmission channels and monetary policy objectives,these literatures provide ideas and methods.The research of this paper is mainly carried out in two aspects.Firstly,in terms of theoretical analysis,it qualitatively examines the direction and theoretical mechanism of the impact of population aging on policy interest rate transmission channel and bank loan channels through construction of IS-LM and CC-LM models considering aging factors.Secondly,in terms of empirical analysis,using the Japanese household income and expenditure micro-survey data and panel data from 47 prefectures to study the overall impact of interest rate shock and money supply shock on household consumption and household debt(loan)of different ages,it provides a basis for judging the effect of monetary policy on population aging,then,it not only revealed the indirect mechanism that aging weakened the monetary interest rate transmission channel from the perspective of industrial structure changes,but also pointed out the internal reasons of bank loan channel blocking from the aspect of insufficient loan supply caused by the decline of population growth.Finally,this article jumps out of the transmission channel analysis framework and explores the main challenges brought by the aging population changing the ultimate goal of monetary policy inflation trend.The results show that: firstly,the aging population may weaken the transmission channel of monetary policy interest rate,which is mainly caused by the old people's insensitivity to the changes of monetary policy and the aging population driving the changes of industrial structure.On the one hand,based on the data of Japanese household income and expenditure survey,it is found that compared with the young and middle-aged families aged 25-64,the young families under 24 and the old families over 65 Court consumption is not sensitive to the impact of interest rate and current account balance,even if the monetary environment is loose enough,elderly households do not increase consumption.On the other hand,due to the huge differences in the consumption structure of households with different ages,the research field is extended from micro households to meso industries,and it is found that with the deepening of aging population degree,the life cycle characteristics of consumption structure will be enlarged and the industrial structure will be transformed from manufacturing to nonmanufacturing industry,which will accelerate the weakening trend of interest rate channel;Secondly,the aging population may also lead to bank loan channel blockage,which shows that even if the loan funds(reserve balance)of commercial banks rise rapidly,the middle-aged and elderly households over 50 are not willing to take the initiative in debt,this is because the population growth,especially the decline in the growth rate of the population aged 15-64,will lead to the synchronous decline of loan growth which makes the loan delivery lose the population base;Thirdly,in addition to the traditional interest rate channel and bank loan channel,this paper further analyzes the signal effect and Portfolio Rebalancing effect of unconventional monetary policy,it is found that although these transmission channels can reduce long-term interest rate and increase money supply,they have limited effect on boosting the real economy,which means that the transmission chain of monetary policy in Japan can only be extended to intermediary purposes,and the regulation of the final target may have a tendency of "missing the target",based on this,starting from the perspective of inflation,the ultimate goal of monetary policy this paper finds that the inflation rate is often positively correlated with the proportion of the population aged 10-39 and 65-79,and negatively correlated with the proportion of the population aged 0-9,40-64 and over80,which indicates that the decrease of the proportion of the population aged 10-39 and the increase of the proportion of the population aged 40-64 are important reasons for the continuous low inflation rate in Japan in the past 20 years,the policy implications of the results is that monetary policy,as a short-term policy tool to smooth economic fluctuations,may be "acclimatized" in the fight against deflation driven by long-term factors.The innovation may be reflected in three aspects: firstly,from research perspective,the explanations of the weakening effect of Japan's monetary policy in the existing literature mainly focus on the liquidity trap,balance sheet recession,being dragged down by the banking crisis and monetary policy mistakes,etc.This paper attempts to start with the long-term factor of ageing population which can play a certain complementary role in the research in this field;Secondly,in terms of research content,this paper not only examines the impact of population aging on interest rate channel and bank loan channel from the perspective of transmission channel,but also analyzes the potential possibility of aging influencing the effect of monetary policy by changing the ultimate goal of monetary policy inflation trend.Thirdly,from the academic point of view,different from other studies advocating further strengthening monetary policy,this paper argues that the analysis of monetary effect in aging economies must go beyond making monetary policy and focus on the possible impact of population aging on the real economy.For the Bank of Japan,this paper puts forward the following suggestions: to promote structural reform with moderately loose monetary policy,explore monetary policy tools go directly to real economy,construct a sound policy support system to reduce the uncertainty of consumption expenditure caused by life expectancy extension and thus drive the cycle of consumption,investment and production,support scientific and technological innovation to promote technological progress and thus promote new demand with new supply.There are many similarities between China and Japan,such as economic development process,population change dynamics and the behavior of the elderly.Therefore,in the period of China's transition from an "aging society" to an "aged society",government need to coordinate and cooperate with each other to deal with the risk of weakening the effect of monetary policy from delaying the pace of aging,identifying the risk of aging and resolving the impact of aging. |
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