Why Robert J. Shiller Is Wrong about the Fed’s Role in Housing Bubble 2.0

In the New York Times last week, Robert J. Shiller, one of the creators of the Case-Shiller National Home Price Index, acknowledged that the current “housing boom” is not sustainable, but fallaciously deflects responsibility for this unsustainability away from the Federal Reserve.

Shiller writes:

Low interest rates — imposed by the Federal Reserve and other central banks in reaction to the financial crisis — are the most popular culprit in the current boom. There is some apparent merit to thi...