OLG Extended Model And Analysis Of The Various Factors Which Effects Resident’s Consumption

Based on life cycle theory and the traditional overlapping generations model to explore the factors which affected the consumption under the new economic environment in our country, the three periods of two-way transfer overlapping generation model was built under the new constraints. Theoretically, this article focuses on factors such as raising burden, support burden, aging population and pension insurance. Then study the mechanism of influence on the ratio of consumption by them, calculate the results and compared with the empirical conclutions. The results showed that:Firstly, there is positive correlation between residents’ income and consumption expenditure, more income and more consumer spending, but the per capita disposable income growth rate and the consumption rate’s change is not consistent. At present, Chinese rapid economic growth is accompanied by a phenomenon of high savings at the same time, economic growth means income growth. A large part of people’s income in China is given priority to save, consumer spending is improving, but the rate is still low.In addition, we can appropriate to reduce the actual interest rates to stimulate residents’consumption and improve the rate. When interest rates fall, the offender believes money is more worth than in future and then increase the current consumer spending, the consumption rate will increase, but it’s not the best move in the long run. Higher interest rates will stimulate people to choose more saving, but lower rates can’t increase equal consumer spending because of many factors such as consumption habits, so it’s limited by cutting interest rates to raise the ratio of consumption or to stimulate residents’consumption.Secondly, the urban and rural residents’income gap has inhibitory effect on residents’consumption. Speeding up the urbanization to narrow the income gap has played an important role in recent years; Higher saving behavior may suppress the consumption rate to increase; Within the macro control, regions adopted a policy of fiscal deficit in order to pull the consumption level effectively and make the economy healthy and stable.Thirdly, the decline of child support ratio caused consumption rate significantly lower, while the rise in the elderly dependency ratio also slightly caused the consumption rate to fall. Gradually reducing the children support and increasing the elderly dependency ratio in our country, both of them dampended consumer spending, the former’s effect is larger, the latter’s influence also reflects the important of aging population structure on the other hand.Fourth, an aging population needs more survival for the old, Following as the elderly dependency ratio increased, the consumer demand will increase. Besides, the demand will increase because of the extension of life expectancy. But the old age’s main pension is the offspring’s support and the endowment insurance gold. Considering the aging population, it still squeeze the adulthood or the offspring’s consumption spending, and with age, the possibility of inheritance will be less.Finally, the scope of the augmented endowment insurance coverage, is conductive to the promotion of residents’consumption and improve the rate. Although the consumption of the adult period will be restrained by the expense of the old age insurance, but the life of old age’s security is larger and the consumer expenditure is increasing. It’s more reasonable to use our resources.