Læs hele analysen fra Natixis her
What is the sign of the correlation between growth in emerging countries and growth in OECD countries?
Normally, stronger growth in emerging countries (including China) results in stronger growth in OECD countries, via trade, through faster growth in exports from OECD countries to emerging countries. But in the recent period we have seen a different, opposing mechanism.
The decline in the growth of emerging countries (including China) is pushing down commodity prices, especially the price of oil, and this is stimulating the real income and growth of OECD countries. We seek to determine whether this mechanism now outweighs the mechanism via trade, and whether, therefore, the correlation between growth in emerging countries and growth in OECD countries has become negative.
The answer is yes: at present, the main effect of the decline in the growth of emerging countries is to increase activity in OECD countries due to the effect on commodity prices.
