Let's focus first on the benefits. These activities generate profits for their American shareholders. Still focusing on benefits of globalization, we know that as consumers we have gained access to new products, including compact disks, digital cameras, and fresh raspberries and blackberries in January and February. And as savers, we have gained the ability to diversify more broadly. These benefits have led to a higher standard of living in the U.S. and abroad.
Firms also benefit from globalization.
They gain the ability to diversify more broadly. A U.S. firm that operates in many countries will find that recessions and booms in the many markets in which it operates are likely to be out of sync. This helps to stabilize companies' profits. Firms also gain the ability to make use of financial markets worldwide. In the last few years, we have seen that globalization can also provide a safety valve against overheating of the U.S. economy.