While according to the model the current account balance will be countercyclical, the balance can also decline due to:

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All of the above options can cause a decline in the current account balance. A temporary negative shock such as a harvest failure can lead to a reduction in exports and an increase in imports, causing a decline in the current account balance. A less developed country having a low capital stock may not have the resources to produce enough goods for export, resulting in a trade deficit and a decline in the current account balance. An increase in government purchases, as in war time, may lead to an increase in imports and a decline in the current account balance.

While According to the Model the Current Account Balance Will