Abstract: By employing the Time-Varying Parameter Vector Auto-regressive model (TVP-VAR), the paper identifies dynamically the time-varying relationship between the population age structure change and the current account and economic growth in China. And by taking the periods of Mild Low Fertility-Mild Aging (4th quarter of 2004), Deep Low Fertility – Moderate Aging (4th quarter of 2010) and Moderate Low Fertility – Deep Aging (4th quarter of 2016) as key time points, the paper depicts the impact responses of the population age structure changes on the current account and economic growth at different time points. The empirical results show that the change of population age structure has significantly time-varying characteristic impact on current account and economic growth. The decline in the child dependency ratio has a positive promotion effect on the current account and a significant inhibitory effect on economic growth. At the same time, the increase of the elderly dependency ratio also plays an obvious role in promoting the current account and inhibiting the economic growth. This shows that the interweaving process of the decline in the child dependency ratio and the increase in the elderly dependency ratio has, to a certain extent, resulted in the fall of the current account surplus and economic growth. The comparison of the three periods shows that the effect of population age structure changes on the current account takes on an increasing trend, and that at the present stage of Moderate Low Fertility – Deep Aging, the effect of changes in population age structure on economic growth is still very obvious.

Keywords: population age structure; current account; economic growth; TVP-VAR model