The Impact Of Population Aging On The Effectiveness Of Monetary Policy In Developing Countries

The purpose of two-children policy is to deal with population aging and optimize the population structure, from which we can know that aging has become a serious problem. Many developing countries are also experiencing population aging. With the development of economy in developing countries, the role of the financial sector is increasingly important. Both fiscal and monetary policies facilitate the economy and the latter is undoubtedly an important guarantee.Time is short to carry out this study, the impact of population aging on the effectiveness of monetary policy. The literature at home and abroad is scarce. From the existing foreign research, little research is specifically for developing countries. Domestic literature is mostly theoretical mechanism summary and qualitative analysis.Based on this, this paper has the following two purposes:First, from a theoretical point of view, analyze the impact of population aging on the monetary policy transmission channel and compare the differences between developing and developed countries; Second, from an empirical point of view, estimate the effectiveness of monetary policy in developing countries, test the impact of population aging on the effectiveness of monetary policy, and compare with developed countries for further analysis.The structure is as follows:Part 1 is introduction, including background, significance, innovation and shortage; Part 2 is literature review; Part 3 is theoretical mechanism and lists impacts of aging on transmission channels and differences; Part 4 calculates effectiveness of monetary policy using TVP-VAR; Part 5 tests the relationship of aging and effectiveness using panel; Part 6 draws the conclusion and suggestions.The study found that aging in developing countries will indeed weaken the effectiveness of monetary policy. However, comparing with developed countries, due to the wealth structure difference and other factors, the degree of weakening is inferior to developed countries. With the gradual deepening of the degree of aging, developing countries should adjust monetary policy to avoiding the weakness and improve macro-prudential assessment system.