From the Financial Times:

Alan Greenspan has hit back at critics who blame the Federal Reserve under his leadership for causing the US housing bubble by keeping interest rates too low for too long in the early 2000s, saying the evidence of any link between monetary policy and the bubble was “statistically very fragile”.

Writing in the Economists’ Forum on FT.com, Mr Greenspan says he is “puzzled” why so many commentators seek to explain the US housing bubble in terms of Fed actions when many other economies with different central banks and different monetary policies also saw rapid house price gains.

The former Fed chairman says the most likely cause of this global house price boom was a “dramatic fall in real long term interest rates” around the world, which he believes was caused by abundant global savings.

In any event, Mr Greenspan says, it is only with hindsight that it looks like the US economic recovery was well enough entrenched before 2004 to allow the Fed to start raising interest rates sooner than it did.

“With inflation falling to quite low levels, that was not the way the pre-2004 period was experienced at the time,” he says.