The federal funds rate effect on subprime mortgage crisis management: An ARDL approach

This research empirically investigated the effectiveness of interest rate policy Federal Reserve (Fed) on managing subprime mortgage crisis. The study employed autoregressive distributed lag model (ARDL) to analyze stability Fed’s monetary policy, thereby providing an alternative analysis tool. Correlation results showed a strong positive and statistically significant relationship between Fed funds labor market, negative housing price stability. In contrast, ARDL bounds test for cointegration indicated that house index (HPI), were cointegrated, hence exhibiting long-run with rate. demonstrates additional empirical studies using new techniques are required reevaluate Fisher effect expand understanding mechanism rates inflation. issue is extremely important, particularly countries such as U.S., UK adapting inflation targeting operational target.