An Analysis Of The Impact Of China 's Population Aging On Financial Asset Price

The aging population will affect all aspects of the economic and social development. The aging population, not only affects the public service, payment of pension, labor supply which is associated with old age, but also affects financial asset price and stability of financial market which is a mountainous challenge. At present, our country is facing a deepening and accelerating aging population, and it must have a bearing on our financial market in the future which should attract enough attention from policy makers.First, this paper makes a theoretical analysis on the relationship between the aging population and financial asset price systemically. It constructs a theoretical framework which is based on the life cycle theory, law of supply and demand and wage driven inflation theory. The aging population will have a significant influence on financial asset price from three perspective of the labor, saving and investment. Based on the above analysis, this paper derives the formula of the aging population and financial asset price with overlapping generation model and general equilibrium theory. And we have found the conclusion that the deepening of aging population degree of will lead to a decline in the price of financial assets. Next, we make a statistical analysis on the main financial asset price of our country using historical data from 1990 to 2014. Then we establish a vector auto-regression model of monetary asset price. At last, we have found that there is a significant negative correlation between the degree of population aging and financial asset price in China. It means that there is a downward trend in the financial assets price in our country with the deepening of the aging population which could help policy making. In the end of this paper, we put forward some policy advice which could promote the development of China’s financial market stably based on the research achievements of this paper.