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This paper examines the stability of financial markets, emphasizing their importance in economic systems by enabling efficient capital allocation, risk transfer, and information dissemination. It explores the impact of market volatility on the economy, highlighting wealth effects and financing conditions. The study identifies key factors influencing market stability, including robust regulatory frameworks, transparency, and risk management systems. It also evaluates the effectiveness of monetary and fiscal policies in mitigating market fluctuations. The paper underscores the need for adaptive policies, analyzing historical and international experiences to provide insights for future stability measures. Finally, it stresses the importance of international cooperation in enhancing global financial market resilience, advocating for shared information, unified regulatory standards, and collaborative efforts among international financial institutions.
Chunxiang Zhao (Sun,) studied this question.