How did the federal funds rate compare to that suggested by Taylor's rule following the 2001 recession and during the Financial Crisis of 2007-2009? How would proponents of Taylor's rule evaluate monetary policy in each period

What will be an ideal response?

Following the recession of 2001, the federal funds rate was consistently below that suggested by Taylor's rule. This indicates that monetary policy was too loose and, according to some economists, may have contributed to the housing bubble. During the Financial Crisis of 2007-2009, Taylor's rule suggested that the federal funds rate should be negative, indicating that the Fed should maintain a very low rate and perhaps engage in quantitative easing (since the federal funds rate cannot be negative).