Impact On International Capital Flows, Demographic Changes

What causes international capital flow? The debate of the issue has been lastingin the international finance sector.This paper selected demographic perspective toexpand research and discussion,looking for theoretical and practical evidence thatpopulation structure changes cause international capital flows, and analyzed thisthrough demographic effect model, static and dynamic analysis and panel datamethods from theoretical and empirical level.This study found that older and juveniledependency ratios significantly and negativly impact on international capital flows.Finally, the forecasting of future trends of international capital flows was madeapplying the theory of this paper, and made policy proposals from five aspect asgeo-strategic, population policies, crisis prevention, the macro-control and financialdevelopments.The perspective selected that demographic structure impacts on internationalcapital flows is rare in past literature and studies.In the empirical part,generalizedmethod of moments,mixing OLS, fixed-effect model, seeming unrelated regressionand other empirical models and methods were applied to research and study the paneldata of120countries.This paper provided empirical evidence and contributions to theresearch in this area with innovative idea and methods.China is a populous countryowning huge foreign exchange reserves and capital flows scale.Taking populationstructure and capital flows into the same frame for researching will inspire morethinking.