Which Countries Economies Are Negatively Correlated With Each Other?

 Economies of countries around the world are often considered to be correlated, meaning that when one country’s economy does well, another is likely to see a similar increase in economic performance. However, there are also cases where economies can be anti-correlated with each other; meaning that when one country’s economy performs well, the other will experience a decline in performance.

One example of an anti-correlation between two countries' economies is that between Australia and Canada. When oil prices rise (which generally helps Canadian exports), this tends to put downward pressure on Australian export commodities such as iron ore and coal which compete with Canadian oil for market share. Similarly, when commodity prices fall (which usually benefits Australia's export sector), this tends to put upward pressure on Canadian oil exports. Another example of an anti-correlation is between the United States and Japan. When the US economy is doing well, it generally means that demand for Japanese export goods such as cars and electronics decreases, since more people are able to buy products made in the US. Similarly, when the Japanese economy does well, this usually puts downward pressure on US exports because consumers in Japan have less money to spend on imports from other countries. Finally, there is also a negative correlation between China and India’s economies. When Chinese economic growth increases (which often boosts Indian exports due to their large trade relationship), this can cause India's currency value to appreciate which makes Indian exports less competitive. When India’s economic growth increases (which usually helps Chinese exports due to their large trade relationship), this tends to put downward pressure on China's currency value which makes Chinese exports more expensive. In conclusion, economies of different countries can be anti-correlated with each other when there is a direct competition between them in terms of export goods and services or when one country experiences an increase in economic performance while the other sees a decline. Examples include Australia/Canada, US/Japan, and China/India.