An Analysis of the Impact of Population Ageing on Inflation in China

Abstract: The relationship between demographic change and economic development is one of the most recent and important research topics. Researchers have found that aging will have a certain impact on inflation, but there is still a research gap and controversy on China's inflation problem. Therefore, this paper collects data on the aging process of China's population and inflation rate between 2004 and 2023 and applies graphical analysis and literature analysis to study the data to try to find a cleaner relationship. Through the research, it can be concluded that China's changing population structure has a relatively inhibitory effect on inflation and a negative effect on economic development. The reason may be that the decline in the labor force caused by population aging has a greater impact on aggregate demand than on aggregate supply. Overall, to reduce the impact of the deepening process of population aging, postponing the retirement age and developing the elderly care industry can be an effective way to boost aggregate supply growth to control the increased inflation rate.