The world share of SDR of USA

The world share of SDR of USA

The world share of SDR of the USA is not so enough to supply international liquidity to maintain world balance of payments equilibrium.US SDR share ranges between 25-30% during 1971 to 2013.The US world share of SDR is increasing slowly at the rate of 0.47% per year during the period of 1971-2013.But this rate is not enough to meet liquidity. The estimated equation is given below,

Log(x) = 3.2601+0.004716t

                (30.08)* (1.099)

 R²= 0.0286  , DW= 0.2125  , and F= 1.207 where x= world share of SDR of USA

The t value of the trend line is insignificant, F value is insignificant and also DW  and R² are very low. So, this trend line is statistically insignificant.

In the figure the estimated line is shown by green line and the SDR series is the red line and the other is the residual.

But the share of SDR of USA is stationary during this course. The estimated ARIMA(1,1,1) model clarified that although the low growth of world share of US SDR is very low but it is stationary. But it has no unit root.

The ARIMA model is shown here,

Logx_t = 3.2950 +0.779 logx_t-1 +_t – 0.0445_t-1

            (186.33)*  ( 5.346)*          (-0.205)

R²= 0.54  , F= 22.89*   ,DW = 1.915  , Inverted AR root= 0.78 and inverted MA root = 0.04 where *= significant at 5% level. Xt is the world share of SDR of USA.

In the figure it is shown as green line and the red line is the logx and blue line is the residual.

The ratio of the world share of gold and SDR of USA  is also decreasing  at the rate of 0.58% per year during the study period 1971-2013.This is shown by the following estimated line.

Log(y) = 0.0699-0.0058t

                (0.671)  (-1.426)

R²= 0.047  , DW= 0.23  , F= 2.053

All the t values, F value are insignificant and even the DW and R² are very low where y= ratio of world share of gold and SDR of USA. So the importance of SDR of USA with respect to gold is very insignificant to meet international liquidity.