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.
Highlights
A market economy assumes the circularity of economic development since it involves inflation, a business climate, law of demand, and other factors
The analysis that we have carried out in the article focuses on the interrelation and interaction of financial markets with the financial cycles of the national economy
A review of Russian and foreign literature provides a various understanding of problems of financial markets, financial cycles and their interaction
Summary
A market economy assumes the circularity of economic development since it involves inflation, a business climate, law of demand, and other factors. National economies develop by way of steady or uneven growth as well as by way of oscillations, which are not random or inadvertent, but are expressive of the economy’s shift from one steady condition to another. 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 with economic cycles. Though the theory of financial cycles is today at its infant stage, it has been rapidly developing since the conceptual emergence of financial markets and the avowal of their significance for global economy. The impacts produced by contemporary financial market tools on financial cycles are a pivotal area of research (Zarubezhnov and Koptelov, 2018).
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