The trough in 1981 had its origin in the very poor macroeconomic policies of the 1970s that can be summarised as traditional Keynesian demand stimulus to the oil-price shocks that led to long-term real interest rates in excess of 10 per cent.
The sharp fall in nominal interest rates following the announcement of the fixed-exchange-rate policy in 1982, in combination with other austerity measures, was not accompanied by a corresponding immediate reduction in inflation expectations. This led to a decline in expected ex-ante after-tax real interest rates that triggered a boom in house prices and private consumption, leading to the peak in 1986.