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.
70 comments:
Ryan Phu
Period 2
The objective of the game is to manipulate the rate in order to keep the inflation rate at a steady rate of 2% and the unemployment rate at 5%. By increasing the Federal Funds rate, unemployment rate increases and inflation decrease. By decreasing the Federal Funds rate, unemployment rate decreases yet inflation increases. My strategy going into this game was to raise the Federal Funds rate then lower it to balance out the unemployment rate and the inflation rate. As i progressed through the game, the inflation rate started to rise and unemployment rate started to fall, despite my constant shifting of raising and lowering of the Federal Fund rate. I continued with my strategy and the rates started to normalize. Unfortunately, I was kicked out of office before the rates could completely normalize.
Shanika Jacob-period 6
As "Chairman" my job is to keep unemployment rate at 5% and inflation rate at 2%. My strategy was to keep the fed funds rate at 4.00. However keeping at 4.00 made customers lose confidence. As I continue to decrease and increase Federal Fund rate to balance out both unemployment and inflation rate. Over time it started to balance it out, however my term was over before it became fully normal.
Vinit Shah-4th
It started off pretty good, I was keeping the rates at their correct percentages until about the 8th or 9th quarter. Then more crises occurred. The price of oil crashed and unemployment soared as well as inflation. My strategy was to lower the Federal Funds rate and raise it when needed, but at the end, I got kicked out because the economy wasn't doing the best.
Hannah Stone 2nd Period
Since my job is to keep unemployment at about 5% and inflation at about 2%, I would adjust interest rates when either of them rose more than .1%. This worked well for me and I got confirmed for another term as Chair of the Federal Reserve. I ended with my term with unemployment at 4.62% and inflation at 2.04%.
I started out by keeping the interest rates at 4% up until the inflation became very high then which I increased the interest rates. Once the inflation lowered, the unemployment rate was increasing so then i lowered the interest rates. I ended with unemployment at 5.59% and inflation at 1.11%.
I tried to keep unemployment low at first then raise the rate so that it would curb inflation. Unfortunately by lowering the rate too soon, I ended up allowing inflation to grow for two cycles which I was unable to lower no matter how much I raised the rate. I ended up with a 5.6% inflation rate and a unemployment rate of about 2%.
Jenny Dyess
p2
Haben Mikaele
Period 2
The strategy i used to become a successful chairman worked very well. During a crisis when both unemployment and inflation rose, i lowered interest rates to bring down the unemployment. Then later i would raise it a lot to lower inflation back down. This strategy was simple and it mad me very successful in keeping the economy running smoothly. It was a fun and great experience as Chairman!
Sabrina James
2nd period
I carefully watched the news headlines to determine whether to adjust rates or not. The only major event I had to compensate for was a major surge in renewable energy that dropped prices, and so I didn't change the funds rate much. Subsequently, my unemployment and inflation rates ended up staying relatively constant; I ended with an unemployment rate of 5.12 and inflation rate of 2.02.
Charith Wijeyesekera
6th Period
My strategy was to first raise the Federal Funds Rate to counter the falling inflation. Then I reacted to whatever I had by first adjusting the Federal funds rate to get the unemployment rate to 5% and then adjust it back to set the inflation at 2%. I dealt with a market surge in household spending. By first increasing the Federal Fund's Rate to increase unemployment, and then lowering it to fix inflation, I managed to mitigate the effects of the crisis. (I was re-elected with an unemployment rate of 5.1% and an inflation rate of 2.9%)
Rolando Pineda, 4th period
My strategy was to maintain a federal rate of 4 until inflation or unemployment began to spike, once it did I would curb it by raising or lowering the federal rate as needed and keep it constant till inflation and unemployment leveled out.
My strategy proved successful but difficult as I had to raise the federal rate to 10 at one point and lower it to nearly 2 when inflation and unemployment ran rampant. In the end inflation was 1.48 and unemployment was approximately 5.50.
Alexis Zamora
6
My strategy as chairman began by keeping the federal funds rate steady until an event that occurred changed unemployment and inflation. Whenever unemployment raised I responded by decreasing the federal funds rate, however this affected the interest rate and ended up raising it to which I responded by increasing the federal funds rate. The major event that impacted my economy was falling oil prices greatly affecting employment and inflation.
Matheus Menezes
6th period
My job as chairman of the FED was to keep inflation low and unemployment low. I used the tips at the beginning of the game and tried to raise rates when inflation increased and lower them when unemployment increased. I probably raised the rates too high and the inflation went too far up. There was a crash during my term, so that also complicated things. And at the end I failed to get reappointed.
Anna Lee
2nd period
I started off slightly raising the federal funds rate to prevent major increases in inflation. Once unemployment began raising, I began reducing the federal funds rate. Eventually, my inflation rate was deflating and my unemployment rate was quickly rising. So, I had to heavily cut down on federal funds. I essentially closely monitored the rates individually to get them in an inverse-like state where I could handle both rates with the same policy at the same time. In the end, I was confirmed to another term as Chair of the Federal Reserve (unemployment rate: 5.71%, inflation rate: 2.17%).
My the beginning of my term my strategy was to keep the federal funds rate constant. However as time went on inflation steadily increased while unemployment continued to decline. I rose the federal funds rate in order to counter the rise in inflation but ultimately it didn't help in the intended way and inflation continues to rise while unemployment continues to fall. As the game went on it seemed like no matter what I did nothing I did led to my intended effects. Ultimately I wasn't reappointed to serve another term due to a high inflation rate.
Throughout the course of the game I alternated the interest rates from moderately low to moderately high. When I saw the inflation rate constantly increase I raised interest rates, but inflation rates kept rising. My method did not work and unfortunately I lost the game with high inflation.
Meghna George Period 2
My strategy was to keep unemployment rate and inflation low at first it worked i kept the federal funds between 3-4% but then the inflation kept going up even though unemployment went down. I did not know how to control the high inflation. At the end I lost because of high inflation.
Joyce Varughese
Period 6
Initially I kept the funds rate at around 5.00 and then waited until around term 3 to adjust the funds rate as there was a financial market crisis. I adjusted the rates depending on how the graph of unemployment and inflation was predicted to behave. If I wanted unemployment rate higher and inflation lower I would raise the interest rates and if I wanted unemployment rate lower and inflation higher I would lower the funds rate. This also depended on the slope of the graph. At one point the graphs were too steep so I lowered funds rate to .25 and gradually raised the rate as the game progressed. At the end of the game I had 4.96% unemployment and 2.81% inflation, and I was reelected as Chairman.
Andrew Olson
Period 6
My plan was to keep the fund rate steady, until things got a little bit out of hand. At one point the country was at 10% unemployment and experiencing deflation at the same time. T'was not fun. However, I responded with a drastic 0% funds rate policy and miraculously, the economy began to show signs of life. Once the economy got back to its normal target state, I jumped the funds rate up to slightly above normal, at 6%, and both Unemployment and inflation hit a plateau for the last 3 quarters. I was re-elected as chairman somehow, and it's safe to say that I'm an economic miracle worker. I call my new policy Olsonomics. It's basically letting the economy have a heart attack, and then performing a metaphorical quadruple bypass.
Julia Mathew
period 2
When I first began the game I kept everything constant before I started to change the fund rates. I decided to lower the fund rates when I needed to boost the inflation and lower the unemployment rate. I also had to determine when to increase the fund rates when I needed to lower inflation and increase unemployment. Eventually my inflation rate began to raise and all I could do was increase the rates steadily in hopes of the inflation rate lowering.
Paige Price
Period 4
My main goal was to keep the inflation rate close to 2% and Unemployment between 4 and 5 %. I would adjust the tax depending on the news headlines and what effect my previous choice of whether to raise or cut did to the economy. Eventually, things got out of hand and both the inflation rate and the unemployment rate were rising and not really giving me any positive results. I do not think I should chairman...ever.
Hannah Kaplan
6th period
My job was to keep the inflation rate close to 2% and unemployment between 4 and 5%. Adjusting the fund rates was a bit confusing, so I would respond to what the news headlines would say. At one point, my unemployment and was really low and my inflation was really high. It caused alot of distress in the economy. Later I tried to balance things out but it was hard. At the beginning I was doing really good before the economy got out of control.
The idea of the game is to manipulate the inflation rate in order to keep the unemployment rate natural. this was a little tricky i discovered it was best to keep the unemployment rate around 4% and the inflation rate roughly at 2% at first i was setting the funds rate to 4 which didn't do much to balance the economy so i moved up to 5 in which a saw the unemployment rate going up so i tried setting the funds rate at 6 which brought the unemployment rate as well as the inflation rate back to were it should be.
My goal was to keep the inflation rate below 3% and unemployment rate under 5%. I continued to adjust the rates and I wasn't sure exactly how to stop the inflation rate from rising. The game had me a bit confused, so the end result had the inflation rate pretty high and the unemployment rate was below 2%. Toward the beginning I had the funds under control, but then the economy went under.
Starting out both inflation and unemployment were a little high, so I tried to balance out inflation first. Once it looked okay I started paying attention to headlines and saw that the unemployment was bound to raise so I began to balance that out but inflation was going out of control. Towards the middle of my term there was no helping inflation and I was in a very bad situation. Despite all my efforts the inflation rose to 12%, but my unemployment was as 1.5%.
My goal was to keep the funds rate constant but it didn't go as planned. After the game kept stopping I sorta just let the game run out of time because I got confused. Sorry Mr. Pye :(
I had to keep the natural unemployment rate at 5% and the inflation rate at 2%. I based my reasoning on changing the feds funds rate on what the news headlines would inform me about. The game was confusing because there would be some terms where my inflation rose really high and unemployment would be really low. At the end of my term, inflation was around 9.5% while unemployment was really low at 1.5%.
Shreya Narayan
Period 6
My strategy was to keep the federal funds rate at 5% and inflation at 2%. By constantly raising and lowering the federal rate, I managed to maintain a balance for about 7 quarters until it got out of hand. When the rate is increased, inflation decreased and when the rate decreased, inflation increased. Eventually it said my economy was failing because of decreasing oil prices
My main goal was to keep the inflation rate close to 2% and Unemployment between 4 and 5 %. I would adjust the tax depending on the news headlines and what effect my previous choice of whether to raise or cut did to the economy. Eventually, things got out of hand and both the inflation rate and the unemployment rate were rising and not really giving me any type of good results. The game was really confusing so I don't think I should ever chairman.
joshua shajie
period 6
My goal was to keep inflation near the 2 percentage mark and also keep unemployment near the natural rate of 5 present. In the beginning I was able to keep both of them near the target but I started to focus more on unemployment and ended the game with 1.50% unemployment rate and an inflation rate of 9.49%. When I saw that inflation was getting higher I moved the inflation rate up but I wanted a low unemployment rate so I thought I can rise the inflation rate up but not too high and that only made it worse. Being the feds chairmen seems hard and it’s like threading a needle.
nabeel 4th
i tried to keep inflation down and the unemployment as well. however inflation kept rising. i tried to lower the inflation but i could not, it just kept going up. eventually i lost because of inflation rising to high
4th Period
In this game, I was trying to balance the inflation(2%) and unemployment rate(5%). For the first half of the game, I had around 4-5% unemployment rate and a couple % high(3-4%) for inflation. However, I started to pick low numbers (interest rate) and that actually made the inflation higher and unemployment rate lower. I tried to balance it out again, but it failed. I ended up with 9% inflation rate and 2% unemployment.
I was suppose to keep inflation around 2% and unemployment rate around 5%, but I did a pretty bad job at it. At first, I chose to raise the feds funds rate, but inflation was rising and the unemployment rate was decreasing. I kept raising the feds funds rate to try to balance the two, but inflation continued to rise and the unemployment rate was decreasing like crazy. Finally, I started to do drastic changes by increasing the feds funds rate by 5% at each term which caused the economy to finally cool down. By the end of the game, I had an inflation rate of 10% and an unemployment rate of 2%. And for some strange reason, I was not reappointed for a second term.
Karina Harris Period 4
my strategy was basically start at 4.00 raise to 4.25 then back down to 4.00 then lower 3.75 then back up to 4.00 again and i got another tearm with unemployment at 5.01 and inflation at 1.58% yay me!every thing stayed fairly constant. my inflation droped then stayed constant until the end when it rose just a hair.
Veronica Wang
Period 6
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.
Tiffany Chan
4th Period
My strategy was to keep the funds rate at 3.75 so I did not adjust the funds rate much throughout the game. During the beginning of the game, everything was going well. However, towards the middle to the end of the game, my unemployment rate gradually rose and my inflation rate gradually decreased. Unfortunately, my unemployment rate was 7.05 percent and my inflation rate was -1.41 percent.
Period 6
The game moved very quickly at first so it was hard for me to recognize what caused either inflation or unemployment rate to change based on an increase or decrease in the federal funds rate. I learned after playing with both of them that low interest rates will stimulate the economy, lowering unemployment and raising inflation, and high interest rates will restrain the economy, raising unemployment and lowering inflation. Changes in the federal funds rate lowered unemployment too much and inflation to much at one point to I had to follow headlines and adjust it accordingly.
Maria Francis
Period 6
As the chairman my job was to keep the inflation and the unemployment rate low by watching what was occurring in the economy with the breaking news. First my strategy was to lower the fed funds rate and that helped lower the unemployment rate by a lot. But then the economy when into a boom and the when I tried to raise the interest rates the inflation just went up and up and wouldn't stop. Overall, I didn't get reappointed because even though I kept unemployment down I failed to keep inflation down as well.
When I first started playing the game, I had no idea what I was doing. So i randomly increased the fed funds rate. Strangely enough, it actually worked and I was doing fairly well. My inflation rate was staying fairly level with the target rate, and my natural unemployment rate was right on the line. However, that did not last very long as I sought a change, so i lowered the fed funds rate by a lot. This caused the inflation rate to increase dramatically. I tried balancing it out by increasing the fed funds rate, but that did not work, but instead just increase the inflation. Unfortunately by the end of the game, I was not reappointed for a second term.
As I was trying to keep the unemployment rate at 5%, I forgot about the inflation rate. I saw the red line take a nose dive in a matter of seconds and the blue line sky rocket. Clearly this was not good for the economy according to the game. In real life if I had gotten the job, we probably would have me removed within days. Needless to say, I was not reappointed for the second term.
Stricklin Snyder
2nd
As I was trying to keep the unemployment rate at 5%, I forgot about the inflation rate. I saw the red line take a nose dive in a matter of seconds and the blue line sky rocket. Clearly this was not good for the economy according to the game. In real life if I had gotten the job, we probably would have me removed within days. Needless to say, I was not reappointed for the second term.
11% inflation and 2.2% unemployment caused me not to get reappointed. Strategy was at first to keep fed fund rates at 4.00. Inflation steadily rose so I increased the fed fund rates to keep up with inflation. Unemployment decreased to a low of 1.5 and inflation continued to rise. Increased fed fund rates up to 15.00 and inflation stayed almost steady with a slight increase around 11%. And unemployment slowly started to make its way back up to the natural unemployment rate
Period 6
My initial strategy was to take very minimalist approach to dictating the Federal funds rate. I began by keeping the rate relatively low to encourage economic expansion and then slightly manipulated the Fed rate to curb the growth of the economy whenever it began too volatile. This method seemed to be very effective in keeping both inflation relatively low and unemployment very low the entire time. Basically, I WOULD MAKE THE BEST CHAIR OF THE FED.
Maya Ewens
2nd period
I kept the federal funds rate between 3.75 and 5 to try to keep the target inflation and the unemployment rate around 5%. As I increased the federal funds rate, most of the time inflation went down and unemployment rate went up during breaking news. The objective is to not drastically increase or decrease anything especially during a crisis.
Russell Wong
Period 6
At the beginning I found it natural to keep it at a steady rate with the funds but then the crashes started happening and I had to readjust to the change. I generally tried to keep inflation near its 2% because Unemployment was easier to get to 5%. However a crash happened and I didn't know what to do so inflation rose till I lost my chance at a second term.
Carly Freker- 6th
I was not very good a this game, completely blanked on inflation and was only focused on unemployment rate. It did not take long for me to become a total failure and if this had been the real economy I would have gotten us in trouble! Sadly, I was not reappointed ):
As I was playing the game, I kept the economy steady for about 3 quarters. After oil prices jumped, inflation and unemployment went up and I could never get it back under control. I kept jumping the interest rate up and down, which probably wasn't a good idea, and I could never get the economy back in order. In the end, my unemployment rate was around 1%, but my inflation was near 10%.
Sarah Gosch 2nd period
I generally tried to keep the fed funds rate between 3-5%. I tried to make as little change as possible, and when I did make changes I wouldn't make further change for 4 more quarters. I increased the rate when inflation got too high and decreased it when it got too low. Trying to control both unemployment and inflation never worked for me. The one time I only focused on inflation, I was reappointed.
Period 2
After attempting this game about 100 times, I have come to a conclusion that I will never be able to run a country's economy, at least without being assassinated at some point in one of my terms. No mater what I tried I couldn't seem to control the inflation rate. It was very easy for me to control the unemployment rate but inflation is a different beast. This game is hard.
Seyi Soyebo
Period 4
The strategy i used was amounts a crisis when both unemployment and inflation rose, i lowered interest rates to bring down the unemployment. Then later i would raise it a lot to lower inflation This strategy was simple and it mad me successful in keeping the economy running smoothly. It was a fun trying to get the expirence of a chairmen. I also tried lowering interest rates durring period of economic growth to see if it would help induce more growth
Amira Nickerson
Period 2
I was able to keep employment steady, nut inflation kept getting worse. My strategy was to simply increase one while decreasing the other, until both were equal. However, that proved more difficult than I imagined.
Gabriel Martinez
Period 2
I was pretty steady throughout. My strategy was to cause one side to go down and the other side to go up. Causing the flow to balance with each other. This helped me when keep steady throughout the game. It was pretty hard then I was expecting it to be.
Geo Kuzhippil
4th period
After playing this game, I came to the realization that having control of the country's economy is no easy task. I did everything I could to control the inflation rate but failed each time I played the game.
Amanda Hong
Period 6
In the beginning of the game it was pretty easy to keep both steady, but as the game progressed it was becoming more and more difficult to keep both the inflation rate and unemployment rate at bay. The two lines ended up crossing towards the end, tremendously exceeding both of their natural rates. My strategy was to alternate between increasing the Federal Funds rate and decreasing it, but it only seemed to work for a short period of time.
When I first started the game, I was so confused because I had no idea what to do. Then I started to keep everything the same so I could change the fund rates. I then decided to lower the fund rates when I needed the inflation to increase and lower the unemployment rate. I also had to figure out when to increase the fund rates and when I needed to lower inflation and increase unemployment. In the end, my inflation rate began to raise and all I could do was increase the rates but I wanted the inflation rate to go down.
Thanh Vo
PEriod 6
My strategy for maintaining a stable economy was to decrease fed funds rate in order to control unemployment. When the inflation rate was in need of control, I slightly lowered the fed funds to increase it. Basically, I raised and lowered the rate to have the unemployment rate and inflation as close to equilibrium as possible.
Controlling the economy is just a difficult task; however I kept on failing even though i was regularly trying to control the inflation rate. I realized that when the cost of oil went up, the unemployment surprisingly went up and I kept on changing the inflation rate which was bad idea in this case since it did not work at all
Ulises osorio 2nd period
My goal was to keep the inflation rate at about 2% and unemployment at 4-5% as the game went on I would stick to reading the headlines in newspapers to see if I should increase or decrease the rates. At one point unemployment and inflation rose simultaneously so my reaction was to lower the interest rate in hope that the unemployment would go back down and luckily for me it did. However, inflation was still high so I raised the interest rates until inflation dropped. Being a chairman is a lot of work. Luckily it was just a game or else I would have destroyed our economy.
Tim Cummins
Period 2
at first I tried to keep the funds rate between 2-5 percent while at trying to figure out everything. I tried keep it constant as much as possible, and when I did make changes I tried to return to equilibrium. I figured out that low interest rates spur growth in the economy, while lowering unemployment and raising inflation, and high interest rates restrict the economy, raising unemployment and lowering inflation. I heightened the rate when inflation got too high and lowered it when it got too low. I somewhat kept the two rates stable but wasn't reappointed.
A thing that I noticed, was that once the inflation rate went up and it was harder to control. I at first was just messing with the fed funds, but as I got into the game the moment I messed up the inflation rate (meaning the rate went above 2%) it was really hard to bring it back down. However the unemployment rate was easier to control and did not change as frequently.
I started the game out by keeping the interest rates at 5% up until the inflation became very high then which I increased the interest rates. Once the inflation lowered, the unemployment rate was increasing so then i lowered the interest rates. I ended with unemployment at 5.45% and inflation at 1.09%.
Giovanny Dominguez 4th period
As chairman when the game first started it was pretty simple to keep the inflation and unemployment consistent .However I realized that as the game progressed it was very difficult for me to control the inflation rate and I failed numerous times to control the unemployment rate.My strategy was to try and keep the federal rates consistent and not increase them or decrease them by a dramatic amount but it really wasn't working out.
I started the game thinking it would be easy however, controlling the economy is a lot harder than it looked. I first started trying to keep the unemployment rate from rising to high by lowering fed funds but by doing that the inflation rate rose very high ,at 10.05. I was aiming to get the unemployment and inflation close enough to a point of equilibrium.
David Edquilang
Period 6
Through some trial and error, I found that setting the fed fund rate to 4.75 provides the most stable graph, keeping inflation and unemployment close to their respective target rates. However, whenever I did this, the game kept throwing out an oil crisis, stock market crash, or some other issue, preventing me from riding that stability through to the end.
Hannah Reyes
Period 4
The game went fairly okay. Although it was hard to keep the graph stable through a housing market crash, I found that both rates were the most stable with the feds funds rate at 4.25%. I discovered this by the time I had 5 quarters remaining.
Timothy Chang- 4th period
My job to keep the inflation rate at 2% and unemployment rate at 5% was harder than expected. I tried to lower the fed funds rate at first, but inflation kept increasing as a result. When I raised the Fed funds rate high enough, the inflation was actually greater than unemployment and kept on increasing until there was an economic boom and my term was over.
Stanie Clement 2nd period
My strategy was to keep the inflation and unemployment rate low so the economy could take care of itself but it didn't work since prices rose too sharply. The price of oil increased and unemployment rose which completely ruined my strategy.
Camdyn Brocail-Period 4
The game was alright, but it was difficult to keep my inflation rate at a low number along with the unemployment rate. Inflation kept raising, even as I tried to lower the federal funds rate!
Geo kuzhippil
4th period
Although all the traits listed above are effective for a CEO to be successful, in my opinion fearlessness is the most important. I allows you to over come your fears and disregard and pessimistic thoughts and instead prevents you from contradicting or second guessing your decisions.
the game placed us at crossroads between inflation and unemployment and we could lower or raise them with a push of a button , my strategy for this game consisted of setting the rates really low in the begining and then trying to stabilize the rates that i had achieved
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