This era saw a major outbreak of price inflation, which had hitherto been seen only during wars. Inflation was not only high, but highly variable, and policy-makers struggled to formulate an effective response. This was extremely disruptive for fixed-income markets, and for financial asset pricing generally. Nominal yields rose to unheard of levels.
10 The business cycle downturns of this period seemed to be much more damaging than earlier post-World War II recessions. In general, it was a period of considerable macroeconomic instability. That instability has subsided considerably since then, as I shall show in a moment.