The financial Cycles in Macroeconomic Asset Markets:  A Strategy for Macro Policies

Zare, Hashem; Rezaei Sakha, Zeinab; Zare, Mohammad

doi:10.30507/jmsp.2021.106237

The financial Cycles in Macroeconomic Asset Markets: A Strategy for Macro Policies

Document Type : Research/Original/Regular Article

Authors

Hashem Zare ¹

Zeinab Rezaei Sakha ²

Mohammad Zare ³

¹ Assistant Professor, Department of Economic, Faculty of Economic and Management, Islamic Azad University Shiraz Branch,, Shiraz, Iran

² MA in Economics, Economics and Management, Hafez Higher Education Instiute, Shiraz, Iran

³ MA in Economics, َ Advisor of the Office of Future Studies, Modeling, and Management of Economic Informaton of the Ministry of Economy, Tehran, Iran

10.30507/jmsp.2021.106237

Abstract

In the wake of the financial crisis in various asset markets, Attention necessity to mutual and simultaneous effects of these cycles in Prevention of deep crisis by imposing adaptive adjustment, flexible and integrated policies by the monetary and capital authorities in the country is inevitable. Thus, this study using a stochastic portfolio literature in a dynamic structural model framework , is investigated the impacts of Return cycles in exchange and gold markets , which have a higher liquidity than other assets, on stock market cycles .The Results significantly implicate the transmission of Exchange and gold markets shocks to the stock market. In addition, the stock market cycles receive more impacts from the exchange market than gold market. So according to the connection of these markets together, the capital market policy makers are recommended to prevent financial collapse and extreme crisis in the stock market during financial crisis in currency and gold markets by imposing supportive policies. It is also advisable to provide adequate support to the capital market in the event that the currency and gold markets are in demand due to future economic uncertainty so that capital will not be sent to other markets for speculative purposes.

Keywords

Stochastic portfolio

Stock Market

Exchange

Gold

Financial Cycles

20.1001.1.23452544.1399.8.32.7.4

Subjects

Financial Economics

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