We propose an empirical SVAR framework from shocks perspective to examine the validity of present value model of current account incorporated world interest rate (second PVMCA). This approach is more useful than previous studies using VAR cross equation test because of its identifying shocks in variables with Blanchard and Quah’s (1989) method which can help to verify variables’ capability to explain current account in short and long run. Through considering shocks characters in data unlike Kano (2008), three sets of Taiwan’s data are used. We find that in support of the predictions of intertemporal current account approach, country transitory shock has significant effect on current account while the effects of global and country permanent shocks are insignificant. In particular, country transitory shock with significant effect on current account is secondary source of output variation, which provides solution for Kano (2008)’s puzzle. We verify that world interest rate and output can explain Taiwan’s current account variation, which provides evidence for the validity of second PVMCA.