This paper analyzes some major empirical issues relating to current account adjustments of 4 industrialized countries in the post-Bretton Woods era. Our main findings are as follows. First, while conventional unit root tests fail to reject the null hypothesis of a unit root of current accounts, newly developed nonlinear unit-root tests reject the null of a unit root in favor of nonlinear mean reversion for the current accounts of Germany and the UK. Second, we find evidence of thresholds of current account in Germany and the UK. Systematic adjustment in the UK current account deficit takes place when the deficit exceeds -2.07 percent of GDP, while for Germany, current account adjustment begins to take place once the surplus crosses 1.64 percent of GDP. Finally, instead of imposing the criteria to select a current account reversal ex- ante, we identify the reversal episodes of large current account adjustments for Germany and the UK using thresholds that are estimated from the data. Our VAR analysis indicates that movement of current accounts of Germany and the UK in the reversal episodes turn out to be dominated by variations in the domestic GDP and real exchange rates.