Falling property prices were the underlying cause of the recent recession, according to Federal Reserve Bank of Minneapolis president Narayana Kocherlakota.

“The size of this shock meant that this recession was going to be a painful and challenging one, regardless of the policy response,” Kocherlakota told the Wisconsin Bankers Association on Tuesday, according to prepared text released by the Fed. “Nonetheless, it is clear to me that the recession and its subsequent recovery would have been significantly worse in the absence of [the Fed’s ] actions.”

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