Population aging is the dominant demographic trend of the 21st century — a reflection of increasing longevity and declining fertility. The purpose of this paper is to provide a basic economic interpretation of how demographic changes affect consumption. Special reference is given to consumption in China under its characteristic background of the rapid population aging, the large rural-urban gap, and the real estate bubble in the past two decades. Arguments are based on some classical consumption theories and results of quantitative studies.departmental bulletin pape
