John Taylor Suggests That Low Interest Rates Played A Role In The Credit Crisis

See Learning From Monetary Mistakes and Doritonomics. John Taylor is the Stanford Economist known for the "Taylor Rule." That rule says that the interest rate the FED sets should be related to the expected inflation rate and how far above or below the full-employment level of output the economy is. If expected inflation is high, the FED rate should be high. It should also be high if we are above the full-employment level of output and low if we are below it. See Taylor Rule.

What he says now is that for most of the 80s and 90s we followed this rule and got pretty good results. But then we kept interest rates too low and this contributed to the housing bubble. He presents a nice chart that shows that countries that kept their interest rates too low were the ones that had the biggest increase in housing expenditure.