The US economy exhibited a dramatic slowdown between the years 1973-1995 when compared to the two decades before that period and the years since 1995. Volumes have been written to explain the elusive reason of this prolonged downturn. The reasons have ranged from low levels of education and an untrained workforce to the spike in petroleum prices that began in 1973. Most economists that have examined this problem have attempted to find a single suspect or a magic bullet. However, the case is much more complex than The downturn was caused by a confluence of negative factors that combined to form the perfect economic storm. The most influential factors that caused the downturn during the period of 1973-1995 were the high cost of oil, the low investment of R&D, and a low confidence in fiscal economic policies.No single factor garners more attention as the cause of the drop in productivity beginning in 1973 than the price of oil. It is a highly visible economic factor and their rising prices coincided in time with the downturn. This coincidence alone is not significant evidence and Olson argues that the cost of energy is too minor to account for the dramatic drop (46). However, Jorgenson points to a second price rise beginning in 1978 and contends that the high price of oil was responsible for a loss of productivity growth in over 80% of the 35 industrial sectors that the study analyzed (34). Economists have questioned this contention by pointing to the collapse of oil prices in 1986 and asking
why productivity did not recover (Olson 57).