John Taylor has argued$$ that: "Considerable empirical work supports the view that interest rates were too low for too long in$2003-2005$ and were a major factor in the housing boom and bust that$$ resulted."

$$Source: John$$ Taylor, First$$ Principles: Five Keys to Restoring$$ America's Prosperity, New$$ York: W$.$W$.$ Norton$$ & Company,$2012,$ p$.133.$

Part $2$

When comparing the actual target federal funds rate and the federal funds rate suggeted by the Taylor rule during the$2003-2005$ period, the Taylor rule federal funds rate

$$

was greater than

was the same as

was less than

the actual target federal funds$$ rate, thus indicating that interest rates

$$

were at the correct rates

were too high

were too low

during the$2003-2005$ period.