South Korea, among the world’s fastest-aging nations, is projected to enter a super-aged society ― over 20% of the population aged 65 or older ― by 2025. Age-driven shifts in consumption patterns may significantly affect monetary policy effectiveness. This study analyzes the impact of age-specific consumption patterns on inflation and monetary policy outcomes, deriving policy implications.

Using consumption baskets, this study compares spending patterns across youth (15-34), middle-aged (35-64), and elderly (65+) cohorts. Findings reveal distinct consumption items by age group, with varying price rigidities. The elderly cohort primarily consumes items with frequent price fluctuations, suggesting a high likelihood of greater sensitivity to monetary policy changes.

Employing Jorda's (2005) local projection method, the study finds that tight monetary policy triggers a larger inflation decline among the elderly cohort than among the youth or middle-aged cohorts, reflecting the higher price flexibility of their consumption items.

These findings suggest that aging may diminish monetary policy’s impact on real consumption. To achieve policy objectives, the central bank must design policies that precisely reflect age-specific consumption patterns and price rigidities, with particular attention to the elderly’s consumption structure. In a rapidly aging society, detailed analysis of age-driven inflation responses and tailored policy measures are essential for monetary policy efficacy.

Abstract (ENG)
Preface
Summary (KOR)

Chapter 1. Introduction

Chapter 2. Age-Specific Consumption Patterns and Inflation
　Section 1. Methodology of Consumer Price Index Calculation
　Section 2. Construction of Age-Specific Consumption Baskets
　Section 3. Inflation Analysis Based on Age-Specific Consumption Baskets

Chapter 3. Price Rigidity by Item
　Section 1. Theoretical Foundation of Price Rigidity
　Section 2. Measuring Price Rigidity
　Section 3. Price Rigidity in Age-Specific Consumption Baskets

Chapter 4. Empirical Analysis of Age-Specific Inflation and the Effects of Monetary Policy
　Section 1. Domestic Monetary Shock Data
　Section 2. Age-Specific Inflation Effects of Monetary Shocks
　Section 3. Discussion of Empirical Findings
　Section 4. Policy Implications

Chapter 5. Conclusion

References
Appendix