Research on the Impact of Population Aging on the Real Exchange Rate
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Keywords
real exchange rate, aging population, ADF test, cointegration test
Abstract
Against the backdrop of China’s demographic aging, this study seeks to investigate the relationship between population aging and the real exchange rate. First, the study selected demographic and economic data from 2000 to 2024. To account for the impact of the COVID-19 pandemic on demographic trends and economic development, data for 2020 and 2021 were excluded. Subsequently, this article employs a multivariate explanatory variable approach to construct a linear model incorporating four variables: real exchange rate, elderly population, working-age population, and GDP, and then employed ADF tests and cointegration tests to analyze the relationships among the four variables. The results indicate that an increase in the elderly population and an increase in the economic growth rate both lead to an appreciation of the RMB, while an increase in the working-age population has a depreciating effect on the RMB exchange rate. So, there is indeed a significant correlation between population age structure and the real exchange rate.
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