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This paper discusses the experience of the EU's eight new member countries (EU8) between 1995 and 2003 when the bulk of capital account liberalization took place, focusing on interest-rate-sensitive portfolio flows and financial flows. It takes stock of the lessons from capital flow patterns to draw policy conclusions. There were two distinct groups in terms of the speed of capital account liberalization: rapid liberalizers and cautious liberalizers. The speed of disinflation and the level of public debt were major determinants of the size of interest-rate-sensitive portfolio inflows. Monetary and exchange rate policies were the main instruments used to react to large interest-sensitive inflows, whereas fiscal tightening was seldom used as a direct reaction to inflows.

Capital movements -- European Union countries. --- Electronic books. -- local. --- Fiscal policy -- European Union countries. --- Foreign exchange administration -- European Union countries. --- Monetary policy -- European Union countries. --- Exports and Imports --- Foreign Exchange --- Financial Markets and the Macroeconomy --- International Investment --- Long-term Capital Movements --- Current Account Adjustment --- Short-term Capital Movements --- Financial Aspects of Economic Integration --- International economics --- Currency --- Foreign exchange --- Capital account liberalization --- Capital flows --- Capital account --- Capital inflows --- Balance of payments --- Capital movements --- Hungary --- Monetary policy --- Foreign exchange administration --- Fiscal policy

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In this paper, we revisit the effects of government spending shocks on private consumption within an estimated New-Keynesian DSGE model of the euro area featuring non-Ricardian households. Employing Bayesian inference methods, we show that the presence of non- Ricardian households is in general conducive to raising the level of consumption in response to government spending shocks when compared with the benchmark specification without non-Ricardian households. However, we find that there is only a fairly small chance that government spending shocks crowd in consumption, mainly because the estimated share of non-Ricardian households is relatively low, but also because of the large negative wealth effect induced by the highly persistent nature of government spending shocks.

Consumption (Economics) -- European Union countries -- Econometric models. --- Crowding out (Economics) -- European Union countries -- Econometric models. --- Electronic books. -- local. --- European Union countries -- Appropriations and expenditures -- Econometric models. --- Fiscal policy -- European Union countries -- Econometric models. --- Macroeconomics --- Public Finance --- National Government Expenditures and Related Policies: General --- Macroeconomics: Consumption --- Saving --- Wealth --- Labor Economics: General --- Fiscal Policy --- Personal Income, Wealth, and Their Distributions --- Public finance & taxation --- Labour --- income economics --- Expenditure --- Consumption --- Labor --- Fiscal policy --- Disposable income --- Expenditures, Public --- Economics --- Labor economics --- National income --- United States --- Consumption (Economics) --- Crowding out (Economics) --- Econometric models. --- European Union countries --- Appropriations and expenditures --- Income economics