ABSTRACT
Although persistent and rising inflation in the 1970s clearly had a major impact on investor decisions and thus on the allocation of credit, its effects occurred in the context of an existing allocative structure that tended to moderate the impact of inflation for some sectors. While the housing sector experienced severe cyclical downtums as disintermediation shifted funds away from savings deposits in periods of high or rising interest rates, it tended to rebound strongly when interest rates fell, and, for the decade as a whole, housing and horne buyers fared better than commercial sectors.
