Saturday, November 13, 2010

The Fed Chairman Game


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.

41 comments:

Sarah Lastovica 7th said...

My idea was to raise or lower fed spending depending on my inflation rate. The problem was that i would hike the spending up three or four notches at a time and the unemployent and inflation rates would raise or lower drstically. i ended up 2% higher than i should be on both. So i tried again. My second trial cam out tens times worse. I decided I would only move the notches one click at a time and not at all if i was doing well. It started out fine, but as time went on and natural events affacted the economy, i was again spiraled out of the safe zone. I ended up with -.37 inflation. Which i figure is pretty bad. =/

Von Harrington Period 7 said...

This game is so hard. If something big comes up you have no idea how to handle it because you don't have the statistics. Without those most of the time I got dismissed well in 2013 early or late, but always there. My plans were to counter the small inflation and deflation with minor changes in the federal fund rate, but then the oil shortage or dollar devaluation caused things to go haywire. If I tried to combat it too drastically then I'd overshoot it and end up bringing too much inflation or deflation, but I never knew how drastic action to take because I had no idea how the rates continued to go up or down even when highly drastic action was taken.

Kyle Newton (Period 2) said...

My plan for this game was to try and counteract the inflation rates right as they started to go up or down. The problem was that I was never able to guess just how high inflation would rise so I would either undershoot it, which would leave inflation still rising, or overshoot it, which caused unemployment rates to soar.It also became problematic when something would happen to lower inflation when you already had a high unemployment rate or raise inflation when you had a low unemployment rate as it left with the issue of having to push unemployment even farther towards one of those extremes.

Ben Maxfield (Period 7) said...

My strategies was to play to the extremes. As the economy would fluctuate one way or the other i would vary my rates by as much as 5% at a time. For the most part i was able to keep the lines close to 2% and 5%. i ended up with less than a percent over 2% on inflation and about 4% unemployment. It was difficult to keep the lines in equilibrium because of their inverse relationship.

Adeet Amin (2nd Period) said...

This game is ridiculous. Every time I adjusted the fed spending, the inflation rate reacted to it accordingly, and it was very difficult to maintain the desired 2% inflation rate and the 5% unemployment rate. My strategy was to adjust the fed spending accordingly however I made drastic adjustments, and thusly my results were drastic, leading to my dismissal as the Fed Chairman. I learned that being the Fed Chairman is not an easy job, and that nothing goes your way the way you plan it. I am glad that I do not have to deal with this mess.

Connie Wang (7th period) said...

I tried to play the game as the rules suggested. When there was inflation, I raised the federal funds rate and when there was deflation, I lowered it. Unfortunate, there was a bit of a time lag and I ended up getting fired because of all the deflation the economy was experiencing. I had trouble adjusting the rate enough; I only moved a few notches and nothing really changed. When I started moving more, the economy would get all out of whack and I had to adjust it again.

Evan Wright (7th) said...

I found the game insanely hard especially the interest rate. It seemed like no matter what I did, the little red line would NEVER go down. I kept on raising the federal funds super high and then super low, hoping for some sort of change, but it seemed like there was no way to make it move. I can't imagine how hard it is for the Fed chairman to experience this without a virtual setting to ensure him that it's not serious. My plan was to balance interest as best as I can, but it's far too difficult to maintain.

Rudy Madabhushi (Period 2) said...

I won the game as Fed Chairman, but it was really hard. It took me two times to win. I figured out that if you raise or lower the fed spending really fast, then you are more likely to lose than get reappointed. My plan was to worry more about inflation than unemployment because it seemed that most of the time, inflation was the one changing the most. After I changed the fed spending rate very little, then that is when I won the game. It was actually pretty fun.

Marian Flores (2nd Period) said...

I didn't do well on the game. Every time I played, I lost. It's so difficult to maintain inflation and unemployment rate. I went with the suggestions and I raised Federal Funds Rate but that only helped for a little while, then I lowered it but it still didn't help. Whatever I tried seemed to make things worse. It didn't help that I was increasing/decreasing Federal Funds Rate pretty drastically. I'm glad that's not my real job because it's a lot of work, and a lot of pressure.

Daron Jacob (7th) said...

Pretty hard. Inflation and unemployment are inversely related, however, there are those stupid events that shoot one up and causes the balance to crash. My method was to handle the one the event caused by using extreme interest rate changes. As soon as that line hits its point of inflection, I radically change the interest rates to fix the opposite problem. The game is pretty tough - almost beat it once. I would do it again until I win but I'm very tired from working on you're stock market project, Mr. Pye.

Rybecca Gilbert (2nd Period) said...

I felt like I was doing well and then there was an oil crisis and then inflation never went back down and ahhh! This game is hard to stratisize for. Honestly, I believe picking random numbers helped me out more that anything.

Rybecca Gilbert

Delores Wei - 7th said...

My strategy for this game was to make big adjustments as needed, but it was difficult to maintain both a 2% inflation rate and a 5% unemployment rate at the same time. I got dismissed from the job because both rates cannot occur simultaneously. When I retried the game, I adjusted the federal funds rate little by little, but not much seemed to change.

Rey Blanco 7th period said...

My plan was to try and make small adjustments throughout the game, and keep the rates steady, but then there was a spending spree from tax returns that sent inflation rates really high. so, i found myself having to make big changes. I thought it was interesting how they simulate the lag between the action and how it affects the market. At the end, i was reappointed though!

alma avarghese (2nd) said...

i love the game when ever i play it i always wins. "the fed guru reappointed"

Tyler Roberts Period 2 said...

I made it to the 16th quarter then got dismissed cause inflation was in the negative and unemployment was well over 10%. Id hate to be the person in charge of that job. No thanks!

Nick Moore (2nd Period) said...

Fed Guru Reappointed: Solid policies sustain economic recovery. I just went with the flow and tried to keep both unemployment and inflation at their optimal levels by raising the funds rate to lower inflation and lowering it for unemployment.

Eileen Gong (7) said...

My strategy was to raise or lower the interest rates depending on the inflation, and for the most part, it sort of worked, though only after a few quarters. I usually ended up going way over or under the target rates, so I'd over compensate in the opposite direction, only to push things too far that way. I at least made it through every quarter without being dismissed, so that's not so bad!

Ashley Day Period 7 said...

So the first part of the game I was doing incredably well and I was laughing at the people who said this game was difficult, then I got hit with an oil crisis. I had no idea what to do and inflation shot through the roof. The game was also difficult because it took several terms for the change in rates to effect the inflation and unemployment rates. In conclusion, I don't think I will ever aspire to become the Fed Chairmen =]

Solomon Wong 7th said...

Well, on my first try I got this: Fed Guru Reappointed: Solid policies sustain economic recovery. This game was not too hard, but dealing with a strong dollar and with an oil crisis is rather difficult. I lowered the interest rate in order to have a larger money supply, which will weaken the to strong dollar. Then I had to counter the oil crisis, and raise interest rates quite high. I had used both ends of the spectrum in order to achieve this. So in reality this game is not too bad, it just requires some thinking and luck ;)

Kelvin Foung (2nd period) said...

Quite an interesting game, now only if the real economy worked this way. Too bad the real economy is not only limited to just this one factor in fixing inflation, recession or unemployment. Overall my results in the game said the Fed Guru reapointed, Solid policies sustain economic recovery and my unemployment rate was 5.32% and inflation 1.37% as a final result at the end of the game.

Grant Yuan (2nd period) said...

I kept the federal funds rate between 6 and 7 percent. Whenever it seemed that the inflation rate was increasing, I adjusted the federal funds rate to 6.5 to 7 percent, and the inflation rate would then go down. Once it seemed to decrease sufficiently, I lowered the federal funds rate back to around six percent, and then unemployment would decrease. Inflation seemed to be fairly easy to control, but it was a struggle to make sure that the unemployment rate would not rise too much. However, I managed to get reelected on my first try with about 5% final unemployment and 3% final inflation. Keeping the federal funds rate fairly stable seemed to prevent the unemployment and inflation rates from fluctuating too greatly.

Frank Chu (Period 2) said...

I tried to keep it at a relatively close position as it was at the beginning. I was doing pretty well but then some huge oil crisis hit. What the heck, why my term? It drove up the inflation rate, which i had to then try to lower by raising the FFR to around 15%. It worked well, too well, the economy soon dropped into deflation. I was forced to make the FFR 0% and watch as deflation loosened and go back to around 1%, and unemployment dropped as well, a double bonus. However, I let it sit for a bit too long and inflation drove past the 3% rate. But unemployment was around 2%. They shouldn't have fired me.

BASIL Raju Pd 7 said...

My initial idea was to try and make minute adjustments throughout the game. I also made sure that the rate was steady. I tried my best to keep inflation and unemployment rate considerably low. One major strategy that I used in the game was to raise funds in order to lower inflation.

Anonymous said...

D.J. Hicks
7th Period

The way i handled the game was to make changes whenever i felt it was the exact right time. This method proved to be difficult to work with when trying to achieve the 2% and 5%.The game did not work out for me and when i attempted it again a changed a few things,but still nothing seemed to work out in the way i hoped for.

Anitta Thomas (2nd) said...

My strategy for this game was at first to adjust the Federal Funds rate a little at a time, but that did not seem to work. Then when I started the game over, I tried a different strategy by making large adjustments,but that did not seem to work either. This game was hard for me! Keeping both a 2% inflation rate and a 5% unemployment rate was difficult to do.

Joyce Zhou (2nd Period) said...

When I was playing the game, I tried to make everything stay stable. When the inflation goes up, I just raise the federal fund rate a lot higher to make it come back to its original level. I was samply doing what the instruction says. Sometimes it is kinda confusing because the inflation rate just goes out of control.

McKenzie Stalcup (2nd) said...

First off, this game is ridiculously difficult...but sort of fun.

The first time I played it, I kept my levels between 3 and 4, and it was incredibly difficult; I didn't last too long. The second time, however, I kept things between 5 and 6 and didn't change it too much. As a result, my results were a bit more stable, if around 1 away from being the optimum unemployment rate and inflation rate.

Carina Velasco (2nd period) said...

I started out okay, but ended up "dismissed" both times I played the game. The first time, unemployment went too high and the second inflation got way out of hand. I tried to just kind of wing it really :) and not change the rate drastically but i guess i had a bad strategy. Somehow I just went all one way or the other. It was hard to see the trends as they occurred since there was a bit of lag before the changed rate really had an impact.

Eric Holt (2nd period) said...

My strategy in playing the game was essentially a wait-and-see policy. I only changed the rate when I absolutely had to, and when I did change it I only increased or decreased it by a maximum of 1%. My plan was working effectively until about halfway through the game, when inflation became a problem because of an oil crisis.

stan tomy (2nd period) said...

my plan was just go with the flow. do what that eeds to be done. if inflations going high bring down slowly and if unemployement is high bring down slowly too. i failed evry time i played this game but i did win it once. its really about inflation not really unempleyement.

Tessy Lal (2nd period) said...

I think I only lasted one term. My strategy was not very powerful. I kept changing the policy all over the place. The dollar depreciated a lot, but I brought the economy back. However, by that time I was fired for unsteady policies. Overseaing monetary policy is not my thing.

Donald Hubbard (7th period) said...

The game's tough. It took me 3 times to win. I figured out that if you raise or lower the fed spending really fast, then you are more likely to lose than get reappointed. My plan was to worry more about inflation than unemployment because it seemed that most of the time, inflation was the one changing the most. After I changed the fed spending rate very little, then that is when I won the game. It was actually pretty fun.

Amber Camacho (2nd Period) said...

Whenever I adjusted the fed spending, I did it in large amounts which then raised or lowered the inflation and unemployment drastically. With the changes I made, the inflation rate raised far too much and lead to the ending of the game. This strategy did not work out accordingly, which led me to believe that being the Fed Chairman is a rather difficult task to accomplish. I don't think its my kind of thing.

Justin Anderson (7th Period) said...

I found the game really hard especially when i had to deal with the interest rate. I would keep raising the federal funds really high and then really low. I can imagine how hard it is for the Fed chairman to deal with this. My planned to balance interest as best as I could.

Isaac I said...

I found the game interesting..but it was reilly hard to maintain low inflation and low unemployment

Alex Cyriac Period 7 said...

If found this game to be moderately difficult. As the economy would fluctuate one way or the other i would vary my rates by as much as 5% at a time. For the most part I was able to keep the lines close to 2% and 5%. I ended up with less than a percent over 2% on inflation and about 4% unemployment. It was difficult to keep the lines in equilibrium because of their inverse relationship.

Leslie said...

I think I only lasted one term. My strategy was not very powerful. I kept changing the policy all over the place. The dollar depreciated a lot, but I brought the economy back. However, by that time I was fired for unsteady policies. Overseaing monetary policy is not my thing.

Anonymous said...

Greetings! Very helpful advice in this particular article!
It is the little changes that make the greatest changes.
Thanks for sharing!

my website :: diets that work

Anonymous said...

Hey! I know this is kind of off topic but I was wondering which blog platform are you using for this
site? I'm getting tired of Wordpress because I've had issues with hackers and I'm looking at options for another platform. I would be awesome if you could point me in the direction of a good platform.

Also visit my webpage venapro

Anonymous said...

Hi! I know this is kind of off topic but I was wondering if you knew where I could locate
a captcha plugin for my comment form? I'm using the same blog platform as yours and I'm having difficulty finding one?
Thanks a lot!

Here is my website: black spot toe nail

Anonymous said...

Hey there just wanted to give you a quick heads up. The text in your content seem to be running off the screen in Opera.
I'm not sure if this is a formatting issue or something to do with browser compatibility but I figured I'd post to
let you know. The design look great though! Hope you get the issue fixed soon.
Thanks

Feel free to surf to my website ... buy idol lip ()