The 2002-2004 housing boom and bust fits the Hayekian pattern: John Taylor's account holds that artificially low interest rates of that period encouraged excessive borrowing and housing construction, and when Greenspan quickly raised rates around 2004-2005 those projects became unprofitable and many were abandoned.

causalpending

Speaker

Larry White

Evidence Quote

the artificially low interest rates of the 2002 to 2004 period encourage lots of borrowing and lots of housing construction

Source

Larry White on Hayek and Money 02/01/2010EconTalk
Created: 6/17/2026, 10:31:20 AM

My Notes

Loading notes...