Despite all the panic, oil price spikes haven't actually slowed down U.S. growth once in the last 120 years.
SSRN · March 18, 2026 · 6430180
The Takeaway
Using 120 years of data, researchers found that while oil shocks cause short-term market pain, they do not change the economy's 'steady-state' path. Long-run prosperity is driven by innovation and financial risk management, rendering even major oil crises as mere temporary noise in the grand scale of economic history.
From the abstract
This paper examines the long-run effects of oil price volatility on U.S. productivity and economic growth. Using annual data for the United States spanning 1900-2019, the longest sample employed to date, we investigate whether oil prices and quantities volatility transmit to the real economy through total factor productivity (TFP) and real GDP (RGDP) growth. Because historical data are available only at annual frequency, we construct a proxy for oil market risk based on EGARCH conditional varian