Author(s)

Jie Gong ¹

Affiliation(s)

¹ Shenzhen Xiaozuanfeng Culture Media Co., Shenzhen, 518000, China

Corresponding Author

Jie Gong

ABSTRACT

This paper deeply discusses the influence of macroeconomic policies on the stability of financial markets. Through the comprehensive use of quantitative and qualitative research methods, this paper analyzes how macroeconomic policy tools such as monetary policy and fiscal policy affect the volatility and stability of financial markets. It is found that tight monetary policy increases the volatility of financial markets by reducing market liquidity and increasing borrowing costs, thus reducing market stability. On the contrary, loose fiscal policy is conducive to improving the stability of financial markets by stimulating economic growth and improving investor confidence. In addition, this paper also finds that different types of macroeconomic policies have different effects on the stability of financial markets, which suggests that policy makers should fully consider their potential impact on financial markets when implementing policies, and choose appropriate policy combinations according to specific economic environment and policy objectives in order to realize the smooth operation of financial markets. The research in this paper not only enriches the theoretical basis of the relationship between macroeconomic policies and the stability of financial markets, but also provides practical guidance for policy makers, which is helpful to optimize macroeconomic policies and maintain the stability of financial markets.

KEYWORDS

Macroeconomic Policy; Financial Market; Stability; VAR; Monetary Policy; Fiscal Policy

CITE THIS PAPER

Jie Gong, Research on the Influence of Macroeconomic Policy on the Stability of Financial Market. Information Systems and Economics (2024) Vol. 5: 31-39. DOI: http://dx.doi.org/10.23977/infse.2024.050505.

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