ABSTRACT
This chapter presents an introduction to the present value model of the current account (PVMCA). This chapter has six main sections. Section 3.1 is a review of the literature on the earlier versions of the intertemporal approach to modeling the current account. Section 3.2 deals with empirical investigations of these earlier theoretical intertemporal models of the current account. The empirical results from estimating the PVMCA are reviewed in section 3.3. Section 3.4 examines the assumptions of the intertemporal models of the current account and their applicability to the Nigerian and Ghanaian economies. Section 3.5 concludes the chapter with a review of the existing literature on current account determination in Nigeria and Ghana.
