The Impact Of Aging On Currency Demand

The Population aging is a social phenomenon that occurs when the economic and social development of a country or region reaches a certain stage.The rapid economic and social development combined with my country’s unique family planning policy has caused my country to face the situation of "getting old before getting rich".The increasing aging of the population is the national condition of our country,and studying and responding to the various social and economic impacts and impacts brought about by aging are topics of general concern to scholars.The empirical research on population structure mainly focuses on the savings rate and the preference of economic entities.The literature on my country’s currency demand is relatively rich,but there are few starting from the perspective of population structure.The literature on the targeted study of the impact of aging on the demand for money is now relatively blank.The innovation of this article is that,based on the domestic provincial panel data,studying the impact of aging on currency demand will help supplement the relevant research on the impact of my country’s aging on currency demand,and help explain my country’s entry into an aging society.The phenomenon of high monetization.The empirical logic basis of this article is the two-way fixed-effect model.According to the LSDV method,it is believed that the model has individual effects.Between mixed regression and random effects,the LM test indicates that the results choose random effects.Choose random effect or fixed effect according to Hausman test.Before the empirical analysis,this paper does a unit root test on panel data and passes the cointegration test.After determining the basic model,this paper deals with autocorrelation,heteroscedasticity and cross-section related issues,and uses the systematic GMM method to deal with possible endogeneity issues.In order to study the heterogeneity of aging demand for money,this paper uses a group regression model.The grouping is based on the division of my country’s eastern,central and western regions.The impact of aging on currency demand has a diffusion phenomenon or a phenomenon of increasing marginal efficiency.The reason may be the increase in the level of economic development.This article uses a threshold model and chooses actual GDP as the threshold variable.In order to verify the robustness of the research conclusions,this article replaced the explanatory variable urban and rural savings deposits with the sum of bank deposits,replaced the euro area sample,and verified the robustness of the results twice.The empirical results show that aging has a positive influence on money demand.The impact of aging on currency demand in different regions is heterogeneous.The aging of the population has a positive impact on the currency demand in the economically developed eastern region;it has a negative impact on the currency demand in the central and western regions with medium and low economic development.The regression results of the threshold model show that the threshold effect exists,and the impact of aging on money demand increases significantly with the increase of real GDP.Finally,this article puts forward relevant policy recommendations based on the aging background and relevant research conclusions.