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The lack of major output effects of oil price shocks since the 1970s calls into question what role they played during the two recessions of that period. In other words, one possible reason why oil shocks seem to have noticeably smaller effects on output now than they did in the 1970s is that the world has changed. Another is that the effects of oil shocks were never as large as conventional wisdom hold, and that the slow growth of that decade had to do with other factors.
