Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"It's a fairly straight forward argument that says the Federal Reserve followed what we would call an 'easy money policy' earlier this decade. They had very low interest rates; in fact, they kept their key rate - the federal funds rate - at 1 percent for over a year, very low interest rates and a lot of credit and money supplied to the banking system. They did that earlier this decade and the analysts - this book - say this really prompted the housing market boom because it allowed people to borrow money to buy homes at unprecedented low rates and it caused there to be a lot of construction, prices bid up, then the Federal Reserve essentially took the punch bowl away later beginning in 2004 when they began a two-year period of raising interest rates, slowing money growth. And eventually that caught up to the housing market, caused the optimism that was in the housing market to dissipate, construction to fall, prices in many markets to fall, and that's essentially where we are today. Now, I think we want to go further there and say, 'Well, why was the Federal Reserve so plentiful with money, why did they keep interest rates so low early this decade, did they want to create a housing boom?' I think clearly the answer is not. I think they were responding first of all to the recession, which we had in 2001, and a very slow recovery from that recession. Secondly, of course, we had 911 and all the uncertainty related to that, and thirdly, we found that in the 1990s the Federal Reserve could actually keep interest rates low and keep an ample supply of money and credit without stimulating inflation due to big productivity gains, so I think the Fed was expecting those productivity gains to continue. This is certainly an argument for worth looking at."