THE INTERRELATION AND INTERACTION OF FINANCIAL MARKETS WITH FINANCIAL CYCLES OF THE NATIONAL ECONOMY OF RUSSIA

Abstract

A market economy assumes the circularity of economic development. Many scholars have speculated on the existing relationship between economic and financial cycles. The emergence of financial markets in the early 20th century gave impetus to the development of the theory of financial cycles which account for financial ups and downs similarly with economic cycles. One of the most impactful areas of research of current trends in financial cycles is the study of how these are influenced by contemporary financial market tools, as this will help determine whether the basic phases of financial cycles can be reconciled.

This article aims at analyzing various aspects of the relationship and the interaction of financial markets with the financial cycles of the national economy in the context of the Russian Federation. We also give consideration to the behavior of the contemporary financial system’s chief players––large corporations, credit institutions, facilitating agencies, and state authorities acting as regulators of financial and economic cycles.