The financial crisis was caused or prolonged in part by the Fer deviating from the Taylor rule: Greenspan held the federal funds rate too low for too long in roughly 2003-2005 and then raised it too fast, departing markedly from the rule-based policy that worked well through the 1980s and 1990s.

causalpending

Speaker

Russ Roberts

Evidence Quote

look at a tailored rule to see that it's just so much different than the policy that was being followed in most of the 80s and 90s

Source

John Taylor on the State of the Economy 07/19/2010EconTalk
Created: 6/15/2026, 9:17:28 AM

My Notes

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