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This paper is an attempt to examine the G-7 sustainability properties of current accounts of seven developed countries, using a methodology based on fractional processes. The purpose of this study is to test for the sustainability of current account deficits in seven developed countries for the 1974:1-2001:3 period. The results indicate that all countries' current account is covariance non-stationary and three countries' (France, Italy and Canada) current accounts are mean reverting so that they are sustainable in the long run, while those of Germany, UK, US and Japan are not mean reverting and are unsustainable. These results should also signal a warning to creditors and policymakers, unless there are policy distortions or permanent productivity shocks to the domestic economies. Furthermore, persistent deficits may lead to increased domestic interest rates to attract foreign capital and, in addition to this, the accumulation of external debt owing to persistent deficits will imply increasing interest payments that impose an excess burden on future generations. [ABSTRACT FROM AUTHOR]