User:Nick Gardner /Sandbox

The contribution of monetary policy

There is some evidence of a connection between the subprime crisis and the Federal Reserve System's conduct of monetary policy. Since the 1980s, the Bank's monetary policy had successfully stabilised the American economy - and its housing market - by the application of the Taylor rule under which changes to the bank's discount rate had been related to the spare capacity in the economy. During the period from 2003 to 2006, however, the discount rate was held well below the level suggested by that rule. The author of the rule, Professor John Taylor of Stanford University, has given an account of the consequences of that departure . He argues that those low interest rates helped to foster the extraordinary surge which occurred in the demand for housing, and that the eventual fall in housing prices would have been less steep, and the following crisis less severe, had the Taylor rule been followed.

Base Values Region Number Altitude Range (m) $P_{b}$ (Pa) $T_{b}$ (K) $L_{b}$ (K/m) $h_{b}$ (m) 1 0.00 to 10,999 101,325 288.15 -0.0065 0.00 2 11,000 to 19,999 22,632 216.65 0.00 11,000 3 20,000 to 31,999 5,474 216.65 0.001 20,000 4 32,000 to 46,999 868 228.65 0.0028 32,000 5 47,000 to 50,999 110 270.65 0.00 47,000 6 51,000 to 70,999 66 270.65 -0.0028 51,000 7 71,000 to 85,000 4 214.65 -0.002 71,000