European capital flows and regional risk

We look at a range of issues concerning capital flows in Europe. We gauge the extent of European capital mobility through an examination of saving-investment correlations. Moreover, we provide further evidence on the extent and effect of European capital mobility through an examination of GNP/GDP ratios across the largest European countries and a comparison of these with similar calculations executed for regions within the UK. Finally, we examine the role of private financial markets in reducing regional risk by developing an empirical model which is then estimated on data for the European Union.