Free Trade, Globalization & "The Great Moderation"
In recent decades, as foreign trade and investment have been rising as a share of the U.S. economy, recessions have actually become milder and less frequent (see chart above, click to enlarge). The softening of the business cycle has become so striking that economists now refer to it as "The Great Moderation."
For the U.S. economy as a whole, the era of globalization has brought healthy long-term growth and a moderation of the business cycle. Expansions are longer if less spectacular than in eras past, and downturns are mercifully shorter, shallower, and less frequent. Moderation of the business cycle in recent decades is something to be thankful for, and expanding trade and globalization deserve a share of the credit.
~From Cato's "Worried about a Recession? Don’t Blame Free Trade," by Dan Griswold