The evolution of capital flows, and the degree of capital mobility, in industrial countries has been analyzed in several studies. Capital flows have been related to macroeconomic rates of return and evidence has been given that, due to the liberalization of financial markets, the sensitivity of capital movements to differences in profitability has increased in the course of the 1980s. This survey of the development of capital flows and its determinants has been complemented by 4 other studies.
In 3 additional contributions, the issue of capital mobility is looked at from a microeconomic point of view.
Finally, the issue of capital mobility has been examined from the point of view of macroeconomic stabilization.
The proposed project aims at assessing the consequences of full liberalisation of capital flows in Europe. It is intented ti investigate the potential for direct investment flows by calculating Tobin's q for different European countries and for different industries. The role of short-term capital flows in the stages before the European Monetary Union is completed will be analysed too. In a special section the developments in Portugal and Spain will be dealt with, where the effects of joining the EC and the removal of capital controls coincided.
Funding SchemeCSC - Cost-sharing contracts
L69 3SG Liverpool