Population Age Structure, The Real Effective Exchange Rate And The Relationship Between China’s Current Research

Since July2005the RMB exchange rate regime reform, the RMB nominalexchange rate and real exchange rate appreciation in general are more than30percent.April16,2012Central Bank of China once again declared the inter-bank spot foreignexchange market trading price of RMB against the U.S. dollar floating rate from0.5%t’o1%. In recent years. Chinas RMB exchange rate fluctuated widely,international public opinion to force the voice continued appreciation of the renminbi.Also as of June2013, Chi’nas foreign exchange reserves up to$3.496,686,000,000(data from the State Administration of Foreign Exchange). Over the years of the "double surplus” phenomenon and the high foreign currency reserves and the resultingformation of huge foreign exchange devaluation makes the yuan within the outer!phenomenon is particularly prominent, and the independence of monetary policyimplementation results are also affected to different degrees.For RMB real exchange rate and China’s current problems, many domestic andforeign scholars from different perspectives done extensive research, because thesample data, modeling and research background differences, generally have thefollowing three conclusions: positive, negative and no correlation. In this paper, onthe basis of previous research，combined with the current changes in the age structureof our population situation，drawing on intertemporal consumption smoothing modelfor life-cycle theory to analyze the age structure of our population, the real effectiveexchange rate and current account balance between effect relationship，trying tochange from the perspective of the population age structure to explain the realeffective exchange rate and current account changes in relationships.This study is the first idea of literature review, the age structure of thepopulation, the real effective exchange rate and current account balance and aretrospective analysis of the impact of relationships intertemporal consumptionsmoothing model of progress; Then the age structure of our population, the realeffective exchange rate and often the basic status of the project to make descriptivestatistical analysis, from the intuitive understanding of the three basic changes;Finally, through intertemporal consumption smoothing model introduces a new studyvariables (labor force participation rate), and theoretically derived from the containing current account balance ca, labor force participation rate dl, and the real effectiveexchange rate reer control variables relational expression of world interest rate r，andthen through the variable data unit root test, VAR model test, impulse responsefunctions and variance decomposition analysis between the three effect relationship.The results showed that: the labor force participation rate is expected for ourcurrent account balance showed a negative correlation: expected labor forceparticipation rate of RMB real effective exchange rate long-term exhibit a positivecorrelation; expected real effective exchange rate index for the impact of currentaccount balance is positive，which is intertemporal consumption smoothing model ismore consistent results. By the variance decomposition analysis found that the laborforce participation rate on the short-term current account balance is less than theimpact of the real effective exchange rate impact on current account balance, but thelong term labor force participation rate on the current account balance of the moreobvious; short term labor force participation rate on the real effective exchange rate oflabor force participation rate is greater than the difference between the impact on thecurrent account. Therefore, this article suggests the Chinese government should payattention to the long-term negative effects of the current account surplus; moderateliberalization" two-child polic"y，to adjust the population age structure; improve theutilization of labor resources, and create a "second demographic dividend"; continueto promote the internationalization of R.MB pace, moderately adjust the exchange ratepolicy.