http://www.cato.org/pub_display.php?pub_id=8726Several important papers appeared in 2006, which reexamine the role of oil shocks in the macroeconomy. A common theme of those papers is that policy-imposed rigidities in the economy were responsible for the bad economic outcomes associated with past oil price shocks. An analysis by economists at the Federal Reserve Bank of Atlanta demonstrated that oil shocks had significant effects on the macroeconomy before 1985 but not after. The authors argued that the federal price control regime of the 1970s was the true cause of the recessions that decade. Economist David Walton at the Bank of England likewise argued that wage rigidities in the 1970s were the culprit responsible for that dismal decade. And economists at the Federal Reserve Bank of Cleveland offered evidence that oil price increases never have and never will cause inflation. They calculated that a doubling of oil prices would lead to a one-time increase in commodity prices of about 3-percent.