Check out this game created by the Federal Reserve. It deals with exactly what we are studying right now, monetary policy. The game puts you in the position of the Fed Chairman, and you must manipulate interest rates in order to balance unemployment and inflation. Click on the learn more button before playing. Investigate the Fed Toolkit and the other items in the help section. After this play the game. Give me a short summary of your strategy and how it went.
45 comments:
I was dismissed as Fed chairman because of price deflation. My strategy was to keep employment stable, which I did, keeping it around 5 percent, but I couldnt figure out how to also keep infation stable, so my economy ended up with price deflation at around -2 percent. But I think I did ok, since I kept jobs stable and prices really loww.
Critics charged me with "poor economic policy." My strategy was to play to the headlines - I tried to account for whatever they predicted. At the end the unemployment rate was 2.94% and the inflation was at 2.71%. Not great, but not too bad in my opinion.
I played a few times but I couldn't seem to keep both the unemployment rate and the inflation rate stable. I would try to fix one while the other crashed and then I would try to fix the other. it seemed to work well to just change it once and to wait several "years" to see the improvement rather than changing the federal funds rate every turn.
I didn't do so good either. My strategy was to keep the federal funds rate steady at 4.5 and just wait for things to go back to normal. When inflation began to get too high, I adjusted it and waited to see what would happen, hoping the time lag would fix things. Things were going pretty well until the middle of the game where I think I adjusted the rate too fast, and inflation rose beyond control.
i thought i was a crummy fed chairman... but apparently i am a fed guru...i dont really know why but who's complaining?
When inflation was rising, i highered interest rates slightly and when unemployment was rising i lowered them. The trick was to do very moderate changes and then see what happens. The unemployment rate ended up a little under 5% and inflation 1.75% so it worked pretty nicely.
It was really hard to try and control both inflation and unemployment. I was trying to follow the headlines to see what i needed to do. Inflation would rise faster than i thought which made it really hard to keep both stable.
I have played this game before, and I really like this game. I played three times and they made me fed guru all three times.
Rosemaria Varghese
Period:7
I was really bad at this game. I was fired twice. I tried to keep up with the headlines, but everything kept going up and unemployment kept going down.
I was dismissed as Fed chairman. After several tries i understood the game though. My strategy was trying to keep the slopes at 0. after about 2 days either the unemployment will have an upward slope and inflation will have a downward slope or vice versa. The trick to the game to me was just using the days wisely because of the lag time that it requires for something to go up or down. I also realize if your inflation goes down to -1 it is really hard to get it up
Fed guru reappointed!
I'm headed for the big-time. :]]
(Okay, so my first couple of tries, I got down to less than 1% unemployment, but had 5% deflation...didn't go so well.) I figured it out, play big with the numbers!)
I was dismissed as chairman because of high unemployment, but I only had one quarter left when I was dismissed. I tried keeping both unemployment and inflation stable by keeping the rate a certain level above the interest rate, depending on how high that interest rate was.
yeah i got dismissed from chairman. i was just messing with the numbers seeing what happened if i lowered it or higher it. dont appoint me as chairman. i tryed to keep the emplyment rate stable but it just kept changing.
This game is rigged!!!!!(lol)
But seriously, its hard being the FED chairman.
I tried everything imaginable, but of course the effects of fixing just unemployment or inflation do not balance out with the other. It was also uncertain for me to make decisions because the economy could break at any second, so I guess there is logical reasoning behind having "trust" in our government and the currency that drives it. Otherwise, we might as well not have a FED or even be a country at all.
O...and I hate anju, rosemaria, and zach for overachieving...I envy you all...
DISMISSED :(
It said that there would be lag time for everything to take effect, so I waited, but nothing happend... changing the rate didnt seem to have a huge effect on the inflation, it seemed to have a mind of its own.
Played a couple of times, didnt do too well, its alot eaiser to suck at this game than it is to do good.
I was fired as Fed chairman because of price deflation. Despite a good start and my efforts to counter inflation by raising the interest rate, the economy flopped. In the end I raised the rates up so high that I cause deflation. I believe that the best way to stay on top of the game is to always change the interest rate on a moderate scale.
I tried my best to keep up with the headlines, which made me decide what to do with the interest rate. But every time I changed the interest rate something would go wrong, either their would be high unemployment or rising inflation. So basically I was dismissed.
"Fed guru reappointed"
"Strong policies sustain economic recovery"
So I guess I did pretty well.
When inflation rose, I increased the federal funds rate, and when deflation approached, I decreased the federal funds rate. Pretty simple.
I was doing pretty well at the beginning. Both were remaining pretty stable, but as the months went on I struggled to maintain the interest rate. My strategy was to follow the newspaper headlines. I was decent at this game, but definitely should not be the Fed Chariman.
Haha i think i lasted the least amount of time out of everyone. unemployment kept going up and i couldn't balance the interest rate either. it was pretty brutal.
I tried the game several times. I tried everything from doing almost nothing to making huge 10% or more changes to the discount rate to try to curb the economy. It seems like everything that you do in this game will be felt 3 or 4 quarters down the line which I supposed is fairly realistic. I wish that the other two tools of monetary policy were available for use.
I was dismissed. It was very difficult, but halfway through I kind of got the idea, but still failed.
-CALLIE
I was dismissed. It was very difficult, but halfway through I kind of got the idea, but still failed.
-CALLIE
I was removed as the chairman because of continued inflation. At the beginning I was doing preety well, but I had trouble lowering inflation. The unemployment rate was around 3.4% and inflation was 4.84%. I think I adjusted the fed finds rate too rapidly.
I was able to accomplish the status of fed guru by not raising/decreasing the fed funds rate too drastically, i kept it within 1.55 each way. as time progressed i watched how the numbers were declining or rising and adjusted the rate accordingly, never paying much attention to the headlines.
Gabe
Yeah, I was dismissed. My unemployment was going up really high so I just put my federal funds rate at 0 and it still got close to deflation. I lose :\
I was reappointed. I simply changed the federqal funds rate according to whether the economy was experiencing deflation or inflation. The trick was to make slight changed, not anything too big.
I failled my first time because of runaway inflation. My second time around I made much less drastic changes and did much better. Reappointed!
the game was nearly impossible to regulate both rates.I did badly but it helped me think more clearly about monetary policy than I could before
I was dismissed for poor monitary policy. Surprise surprise, mr pye. I told you i'd be bad at this. Apparently following headlines doesn't constitute a succesful strategy.
Kathleen Clark
Pd. 7
I was horrible at this game i had alot of problems with unemploment and i had high inflation
On my second try I became fed guru, by understanding that changing the federal funds rate too much could cause either extremes in inflation or unemployment rate. I had to increase the federal funds rate for a certain period of time to control inflation, but then vice versa I had to decrease the rate to maintain unemployment.
I was dismessed as Fed chairman due to "poor economics policy." Of course I blame it on extraordinarily bad timing as the economy was just beginning to recover from some deflation and I was on the road to stop inflation. I ended with 2.915 unemployment and 3.42% inflation. I feel like this game is unfair because everything is so stilted. If you manage to maintain a simple rate of growth or downsizing in either area, something drastic happens. If this happens the rates only seem to respond to drastic measures in either direction (ex. my inflation rate was at 3.42% and it only started to go down once I had set the interest rate to 18.25%). It was terribly frustrating and I have decided that it's all the newspapers' fault for an sort of crisis the economy is going through. If we didn't know about oil shortages or silly things like that, we'd never have to worry about deflation.
On my second play I was able to get reappointed. I did this mainly by starting out slow and decreased/increased the Fed fund rates according to the headlines. I think the only real reason I won was because I would only move funds up or down gradually, only going down by more than 1% only at one time.
LAME! I was dismissed and tried it twice and then gave up.kepping employment stable was the hardest part for me.
I anticipated what the headlines said and raised/ lowered the federal funds rate preemptively. My initial mistake was to adjust the rate while either employment or inflation were veering way off the target rate. I also learned that keeping the fed funds rate the same for over three or four quarters only lets the inflation and unemployment graphs get further away from the target rate and that too drastic of a change in the fed funds rate has the same effect.
I became the guru once by accident. I tried to fix the economy by letting the unemployment go down for long time and then pushing the price level up at end. but that's why i got fired, for bad economic policies. that job is ridiculously hard unless you have proper data
the problem was, the inflation and unemployment won't change quickly but will take around 2 terms to change direction. that was a problem
It was kind of hard to keep one stable without the other going all wahzoo. When I would try to make inflation go down, umeployment rate would go up and when I would try to keep unemployment stable, inflation would go way up. It seemed like when I waited "months" they would stable out, but overall I think that if i hadn't adjusted the rate so much, things would've gone better.
I was dismissed, what i disappointment! this game was pretty fun pye! i mean for trying to learn about inflation and whatnot, thanks for giving us a new view on economics!
The game was fun and I finished my term as a fed guru.
The interest rates were inverse to inflation yet directly proportional to job growth. Both unemployment and inflation moved in curves and progressed in the same direction with very slow change in moderate policy was taken. Thus most of my moves were drastic which allowed me to keep the curves relatively flat.
Hmmm... It's hard to say what my strategy was. At first I let the interest rate remain unchanged, which made both inflation and unemployment rise, which was difficult to adjust for. So I ended up raising interest rates extremely, which drastically brought inflation down. After inflation was low enough, I extremely lowered interest rates which brought down unemployment to a low point. Then I kept int. rates at a relatively moderate point which kept both inflation and unemployment stable. My end result was "Fed Guru Reappointed" with an interest rate of 3.5%, unemployment at 4.36%, and inflation at 2.09%
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