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What Determines the Current Account: Intratemporal versus Intertemporal Factors


  • Piotr Dybka

    (Warsaw School of Economics)

  • Michal Rubaszek

    (Warsaw School of Economics
    Narodowy Bank Polski)


This paper adds to the discussion on the determinants of the current account balance. In particular, we construct a large balanced panel of data for 101 countries and 15 years covering observations for the current account and 18 explanatory variables. Next, we apply static and dynamic Bayesian Model Averaging techniques to verify whether intratemporal (i.e. relative demand and real exchange rates) or intertemporal factors (i.e. stage of development, fiscal balance, demographics) are crucial to understand current account developments. Our results indicate that the latter are key drivers of the external balance, which provides support for the intertemporal model of the current account.

Suggested Citation

  • Piotr Dybka & Michal Rubaszek, 2017. "What Determines the Current Account: Intratemporal versus Intertemporal Factors," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 67(1), pages 2-14, March.
  • Handle: RePEc:fau:fauart:v:67:y:2017:i:1:p:2-14

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    Cited by:

    1. Beata Bierut & Piotr Dybka, 2019. "Institutional determinants of export competitiveness among the EU countries: evidence from Bayesian model averaging," NBP Working Papers 306, Narodowy Bank Polski, Economic Research Department.
    2. Bierut, Beata K. & Dybka, Piotr, 2021. "Increase versus transformation of exports through technological and institutional innovation: Evidence from Bayesian model averaging," Economic Modelling, Elsevier, vol. 99(C).
    3. Piotr Dybka & Bartosz Olesiński & Marek Rozkrut & Andrzej Torój, 2020. "Measuring the uncertainty of shadow economy estimates using Bayesian and frequentist model averaging," Working Papers 2020-046, Warsaw School of Economics, Collegium of Economic Analysis.
    4. Dąbrowski, Marek A., 2021. "A novel approach to the estimation of an actively managed component of foreign exchange reserves," Economic Modelling, Elsevier, vol. 96(C), pages 83-95.
    5. Piotr Dybka, 2020. "One model or many? Exchange rates determinants and their predictive capabilities," Working Papers 2020-053, Warsaw School of Economics, Collegium of Economic Analysis.
    6. Karol Szafranek & Marek Kwas & Grzegorz Szafrański & Zuzanna Wośko, 2020. "Common Determinants of Credit Default Swap Premia in the North American Oil and Gas Industry. A Panel BMA Approach," Energies, MDPI, vol. 13(23), pages 1-23, November.

    More about this item


    current account; panel data; bayesian model averaging; intertemporal model;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics


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