What is the purpose of financial markets? How does a financial market (such as a market for stocks and bonds) work? Financial markets are markets specifically designed for moving and managing money. This includes stock and bond markets as well as insurance markets. What other markets do for tangible goods, financial markets do for capital—essentially, they direct it to where it can be the most productive, which, in general, is where it’s earning the highest return. In this article, we’ll explore the economics of financial markets, explain the four basic needs they serve and discuss the common misbelief about financial
Understanding the Economics of Financial Markets
