| Abstract | This paper examines the effects of population age structure on the provincial RMB real effective exchange rate in China by theoretical model and empirical test. The theoretical model shows that population age structure may affect real exchange rate through “demand structure”, “current account” and “labor productivity” these three kinds of mechanisms. Then, we measure the provincial real effective exchange rate in China, and thus empirically study the impacts of population age structure on RMB real effective exchange rate. The empirical results show that, population age structure affects RMB real effective exchange rate significantly, furthermore, among the three mechanisms, the “labor productivity” mechanism plays the dominant role, specifically, the increasing of the labor population proportion (total population dependency ratio) will significantly appreciate(depreciate) RMB real effective exchange rate via “labor productivity” mechanism, while the “demand structure” mechanism and “current account” mechanism are both not significant. |