Sunday, November 03, 2013
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.
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51 comments:
The game wasn't really all that hard. If inflation got too high, raising the federal funds rate was an easy way to make it decline. The same worked for lowering unemployment by adjusting the federal funds rate to be closer to the inflation rate. The only real problem I had was if I adjusted something too much and ended up having to overcompensate for a previous change.
Reading the learn more and toolkit options beforehand made the game seem deceivingly hard. The instructions when you start the game are all you really need. I just followed the headlines and watched both my unemployment and inflation rates. If the inflation rate got to be high, I raised the federal funds. If the unemployment rate got to be too high, I lowered the federal funds. It wasn't that hard to stay close to the desired unemployment and inflation rates.
The game was pretty easy. For the most part, I just let the economy do its thing. If inflation got to high, I raise the federal funds, and if unemployment got to high, I lowered the federal funds. Even with an oil crisis, it was not hard to keep inflation and unemployment close to their desired rates.
The game was pretty easy. If inflation got to high then I raised the federal funds and if unemployment increased I lowered the funds. Pretty straight forward
The game was all to simple. I had a careful eye on inflation rates and unemployment. Whenever the inflation rate began to increase I simply raised the federal funds. And when the unemployment rate shot up I lowered the federal funds. The only problem I had was when I decided it would be interesting to see if increased the federal funds by 10 and I immediately was kicked out.
The game isn't difficult, if you don't try to help out too much and if you stop a problem before it gets too bad. It's a lot easier to have small changes and is a lot less devastating to the economy than a lot of big changes. If the headlines predict inflation, people then believe it will occur so adjusting the FED rates before the problem begins keeps the problem smaller, and the same for unemployment.
Honestly, the game wasn't as difficult as it seemed. Keeping an eye on both the unemployment rate and inflation rate, I adjusted my federal funds rate accordingly. I made sure it was well above the inflation rate to try and reduce inflation, all while keeping an eye out on the unemployment rate. Then, once the inflation rate was low enough, I adjusted the federal fund rate to be close, but just above, the inflation rate to bring down the unemployment rate. I didn't have that big of an oil crisis; it didn't really skew my plans or rates.
The game was all to simple. I had a careful eye on inflation rates and unemployment. Whenever the inflation rate began to increase, I simply raised the federal funds. And when the unemployment rate shot up, I lowered the federal funds. The only problem I had was when I decided it would be interesting to see what would happen if I increased the federal funds by 10. As soon as I shot the federal funds up, I was immediately greeted by a pop up which informed me that I was no longer Fed Chairman.
For all those saying the game was easy, you guys deserve jobs at the federal reserve! Really! For me, the inflation rate was the biggest problem in manipulating. My strategy was to heighten and then subsequently lower federal funds to extremes in order to reach a balance in unemployment, inflation, and interest rates. This strategy did not work well because it shot the inflation rates through the roof, and I was fired, understandably.
My strategies are, first, let the federal funds rate remain the same until some events happen. Then, if inflation rate goes too low or unemployment rate goes too high, then lower the federal fund rate. If the inflation rate goes too high or unemployment rate goes too low, then raise the federal fund rate. My strategies did not work well the first few times, but then after I got used to the amount of federal fund rate needed to adjust, the strategies worked well.
At first I listened to exactly what the newspaper said and it would help me equal out the inflation and unemployment rate for three months, but then it would do drastic things causing one of the rates to soar or decline. After a couple of games, I tried leaving the interest rate at a constant rate and it worked. The unemployment would equal out with the inflation and then when one would exceed the other, I would adjust the inflation rate depending on which one was in need of changing and it would become equal again. Sometimes even then, however, I always ended up with at least a 3% difference between the two rates.
In the beginning I kept on losing because I didn't notice the newspaper was giving me information on the economy but once I saw it it became easier. You would increase federal funds if inflation got too high and vice versa. If unemployment got too high you would decrease federal funds and vice versa.
The game wasn't hard, but it wasn't easy as well. It was a struggle keeping inflation from becoming deflation while still keeping unemployment low. However, in the end, it was do-able with careful adjustment of the federal funds.
Overall, this game was an accurate representation of utilizing the monetary policy. To tell the truth, I actually had to play the game twice to master it. The first time I played, I kept raising the federal funds, which had an inverse effect on my outcome. With this, inflation increased and unemployment decreased. I suppose this is because the price level did not accommodate the inflation. But the next time I played, I made sure to only increase the federal funds by a small margin in order to keep the inflation rate in balance. It was a fun game.
I found this game very entertaining and addictive. My strategy was to plan long term. If interest rates were currently climbing, i would drastically lower the fund rate, then raise it a little again so that everything would kind of balance out. It seemed my strategy worked, as I ended up with an unemployment rate of 4.69% and an inflation rate of only 2.12%.
I agree with Leah. The tool kit made me apprehensive because it made me believe that I would need to remember all of that while playing the game when all you really need is the instructions for the game. Just like everyone is saying, all you need to do is raise the federal funds if inflation gets to high and lower them when unemployment gets to high. My only problem was that I kept changing the funds too much because I wanted the desired effects now instead of hopefully working things out better if I did it gradually.
This is child's play. By simply analyzing the current situation at hand and assessing the information such as the newspaper, all you need to do is respond and react. If inflation got too high then proceed to changing the federal funding to fix it; A typical output-input action. A simplistic, basic strategy if that is to be even considered a strategy.
If only the economy was this simple...
I expected this to b e difficult and to have to try a few times, but it seemed like common sense honestly. When inflation started to get too high then I would just raise the federal funds and if unemployment increased too much then I would I lower the funds. Simple and easy.
To be honest, I liked playing but I did not really like the gist of this game. It does portray an example of managing the Federal Reserve's role to support the economy in terms of employment and inflation. However, I feel that the programmers were simplifying the entire scenario into seeing whichever direction the player can increase or decrease the federal fund rate to supplement the economy's employment and inflation at the exact rates they wanted. The only way a player can truly meet the game's goal of staying consistently at the rate is to precisely predict how far the unemployment and inflation rate will rise or fall as a result of the policies in place. Oddly enough, I tried multiple attempts in order to see what results I could get.
My first few attempts had me fired for having either inflation too high. I never had unemployment above the recommended level since I would naturally decrease the federal rate below the actual inflation rate. Then, I tried following the game's standards of lowering and raising the federal fund rate appropriately to whatever scenario occurred. I was dismissed for the remainder of my attempts for "poor economic policy" since I would abruptly raise the rates as a result of the event and within 2 quarters the issue was resolved. Still, I would be dismissed for the changes I made even when I had the exact inflation rate and even lower unemployment.
Only once was I reappointed, and this time I did not even try to play the game. I barely raised the rate .25% every quarter and I just predicted every scenario (had the Stock Market drop and caused increased unemployment at first) and let the curve slowly dissipate over the quarter cycle. I ended up having a significantly higher inflation rate than before and a slightly lower unemployment as a result, which meant the programming for the successful result or being reappointed as chairman or chairwoman was dependent on consistency. I feel like that factor should be improved for a more accurate result of one's gameplay but I digress.
I would like to include more factors, but not too many, in order to ensure accuracy when depicting economic growth. I really liked the economic dictionary included in the game as it simplified the meanings on each economic term related to the Federal Open Market Committee and Federal Reserve. Hopefully the programmers could improve upon this game and actually add upon the segments of what independent policy is and how the Federal Reserve works in their terms.
The game was basically simple and easy to understand. Mainly all you had to understand was that if the inflation in our economy went up you would raise the federal funds and if the unemployment increased then you would have to lower the federal funds. This game really helped me understand how the federal funding works
The main focus of the game is to keep everything stable and that often happens when you don't do anything. Whenever, inflation got too high, I would set the federal funds rate way above the inflation rate and whenever unemployment was too high, I would set federal funds close to the inflation rate.
After a few attempts, the game became pretty easy. My strategy was to not move too far in either direction by avoiding large changes in the federal funds.
I found the game really difficult at first. My unemployment rate was really low (about 1.5%) but my inflation was extremely high (11.5%), and by the time I realized how the game worked I was fired. Next time I play the game I will be sure to keep a stable balance and not play around with the federal funds to much initially. I've learned to keep the federal funds pretty consistent and then adjust to what the economy needs when I see a change in the two factors.
When I first played the game I lost, and it took a few more tries before I finally got a strategy of how to win. You had to pay attention to all the aspects that were given to you. The rates, unemployment as well as what the newspaper says all played a role on helping you realize what to do. I decide to adjust them at a constant rate and that helped me win. When I first played I kept moving the rates too much which led me to loose the game.
The game is simple and easy but that is not the point of the game to be hard. The point is for people to understand the basic concepts behind the actions of the federal banks and the monetary policy they do. The game itself oversimplified and made it really easy to win by setting high fed funds and then lowering them whenever interest rose a little. Overall, this is not at all a good representation of what the fed has to do but it does help people have basic understanding.
On a scale from easy peasy to mission impossible this game was about a 27. When the inflation rate began increasing I would raise the federal funds and when the unemployment rate began increasing I would lower the federal funds. The game is a good way to understand how the federal government manipulates federal funds and the effect, however the game is over simplified.
I agree with Leah, the learn more button, while interesting, did make the game seem more difficult than it actually was. For the most part, the strategy listed by everyone else works adequately: If inflation starts to rise, then raise the federal funds; if unemployment raises, then lower the federal funds. While the crisis's in the middle of the game may throw this off, the general rule seems to apply well consistently throughout the game.
The game was fairly easy. For each quarter, I observed how the economy reacted if I increase or decrease the federal funds. The headlines provided in the game also helped make my decisions for the next quarters. I mainly focused on decreasing both inflation and unemployment in order to keep the economy stabilized. I made sure that if unemployment was too high, I would then decrease federal funds. (I would do the opposite for the increase of inflation)
The goal of the game is to keep inflation, federal funds, and unemployment rates stable. The strategy is to set the federal funds rate well above the inflation rate if inflation got too high and set federal funds close to the inflation rate whenever unemployment was too high.
Unlike everyone else, I sucked hardcore at this game. It is extremely difficult and i can not deal with deflation ever successfully. Overall I suck at being the fed chairman, to the point i googled how to beat it and then was unsuccessful at using the strategy. I will stick to being King Edward and not Fed Chairman Edward.
Yeah, I'm with Al, this game was actually pretty difficult. Their instructions were not helpful at all and the sound effects were really annoying. 0/10 would not play again.
I just read the thing on the left and gradually changed the funds rate according to whatever problem the problem was. It was pretty difficult and everyone here is a liar.
For me, the game was pretty challenging. When I concentrated to decrease inflation rate, my unemployment rate in the country started to rise. I finally got how to play the game and realized that I should decrease funding.
The first time I played the game, I had no idea what I was doing, but the second time, I did really well. My strategy was to keep the federal rates really close to the inflation rate. Then, I raised or lowered it depending on whether inflation or unemployment was the problem. Overall, the game was pretty simple.
I kind of played around with it to see what would happen. The first trial was very unsuccessful with an inflation rate of 12% but unemployment was down. So I decided to actually read how it all works. I increased federal funds to lower inflation. That cause the unemployment rate to rise. But after a while unemployment started to go down. As it went down, I lowered the federal funds until the inflation rate hit 2% and the unemployment rate was well under 5%. At a certain point, the things that you expect to occur after giving so much money should happen. Then it would be the time to start to take away and let the invisible hand do it's work to make the country sink or swim.
I dont know why everyone is saying that the game is relatively simple because i sure had a hard time playing it. It was only after many trials did i finally not get fired/dismissed. It is very important read the instructions on the side. The key to this game is preparing for the long run. Depending on wat the headlines are, you must decrease/increase the federal funds rate in advance to keep things stable. This game is much easier if u had a good start. bad starts are really hard to comeback with.
I HAVE THE POWER! The conditions in which the game is played is so limited that, yes, controlling the Federal Reserve would seem easy. The trick to the game is finding the Goldilocks zone of federal funds rate between inflation and unemployment. By this I mean that one has to find a federal funds rate that is high enough above the inflation rate that it keeps the inflation rate lowered but also under the inflation rate that it keeps unemployment pushed down. Changes in the federal funds rate also shouldn't be constant and should be done in small amounts of change at best. For my fellow Federal Reserve Chairmans out there; may the odds be ever in your favor!
The game itself wasn't that difficult. Upping the federal funds would help cope with the inflation rate and lowering them would help with the unemployment rate.
The mechanics of this game was quite easy. All there is to do is to either raise or lower the interest rate depending of the news report flashes that the game gives you. just by reading these reports indicates whether to raise or lower the rate. But apart from that all I did was keep the rate on the same level and the dashed line and everything seemed to work fine. The only thing to watch out for is when there's flashes of bad news, then the rate either had to be cut or raised.
I deflated the US economy by 2017. I caused the interest rate to rise to 19%. The final unemployment rate was 13%. The country was on the verge of ruins. They found me. They came in with pens, briefcases, and cameras as I sat there with a mug in my hand. They were coming after me. So I resorted to my last defense. As they got closer and closer, I did the unthinkable. I dumped my coffee all over them, burning at least 5. Ha! This was it, I had beaten them again. Then I realized, I don't drink coffee. . . It was over, I've been stopped.
The game itself was easy and simple to understand. When the inflation got high, I raised the federal fund. If unemployment increased, I decreased federal funds.
I had a hard time balancing the two. My series of losses was because I didn't realize the newspaper was hints, and I was fired as a chairman. My strategy was to increase and decrease federal spending to seek a balance between the rates.
I had a hard time balancing the two. My series of losses was because I didn't realize the newspaper was hints, and I was fired as a chairman. My strategy was to increase and decrease federal spending to seek a balance between the rates. I have been increasing and decreasing in small increment.
Despite what everyone has been saying this game to be so easy, I actually had to put a bit more effort into succeeding this game. It was common sense to raise federal funds when inflation got too high, but for some odd apparent reason, I would still somehow mess up.
I think a major tip and general idea to follow is that one should attention to every single detail that the game is informing you. Every small bit of information is not there to just make you fall asleep from reading it, but to make you analyze and ready the next step. That was probably why I was having more difficulty than others by not putting all factors into consideration.
The game was pretty easy once i got a holt of the strategy. Apparently having a very low unemployment rate will get you fired.
I actually played around a lot, and I thought that it was interesting when I hyped up the interest rate and extremely lowered it as well. I figured that I should just let the economy do its own thing, and the key was to not change the increments way too much. If the inflation rate got high, raise federal funds. If unemployment gets to high, just lower the federal funds. And then it just evens out in the very end.
At first, the instructions made the game seem like it was going to be hard. However, it was pretty simple. My strategy was to keep an eye on both the unemployment rate and the inflation rate, adjusting my federal funds accordingly. Also, reading the headlines is key, for it tells you how you are doing in the game.
Initially, I thought the game was difficult, but it became progressively easier. I changed the Fed funds rate based on what had happened in the previous quarter. In the end, both the inflation and unemployment rate converged onto the "goal."
The learn more button did make the game seem more difficult than it actually was. It seems as if the strategy of letting the economy do its own thing worked the best because it would even out the most in the end. If the inflation starts to rise then you raising the federal funds will even it out and if unemployment raises then lower the federal funds. That will help try to balance it the best but in the end you just have to leave it up to the economy.
The game was okay, I guess,. I a couple times and got frustrated with myself. You have to watch both the inflation rate and unemployment rate. Then you decide there want to lower an what to raise. For example like Federal Funds. I felt the game was a good learning expierience
I could never win this game after playing it literally like seventy-five times, however I seem to understand how it works. If the unemployment starts to rise then you have to lower the federal funds. If inflation rises, then you have to increase the federal funds. I could never keep my term. The federal guru was reappointed or I was dismissed due to high inflation. This game caused me lots of time and is one of the few games that I could never beat. No matter how hard I try, I doubt I could ever run the government.
It took me almost 15 tries to figure this out - I also stopped making drastic decisions.
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