During one of
his lectures to a class at George Washington University in March of 2012, Ben
Bernanke, the chairman of the Federal Reserve, claimed that the central bank’s
lower interest rates did not trigger the housing bubble that began in the late
1990s and ended in 2006. For one thing, the Fed did not start cutting interest
rates until a few years into the twenty-first century. Also, home prices rose
after the Fed later began raising interest rates. Bernanke also cited Europe,
where housing booms have not been associated with either tight or loose
monetary policy.
The full essay is at "Essays on the Financial Crisis".
