As I noted, the movement of savings across national borders to fund investment has permitted the significant increase in the dispersion of national current account balances. In recent years, the negative tail of the distribution of current account balances has been, of course, dominated by the U.S. deficit. The decline in home bias has clearly enlarged sources of finance for the United States.
The response of many firms to shortages of skilled workers and to foreign competition has apparently been to reorganize what they were doing and how they were doing it, substituting efficient new equipment for employees, training workers to use new equipment and techniques, and outsourcing to reduce costs. All of these have combined to increase productivity.