WASHINGTON: Fed up with the endless talk about interest rates and inflation? Think economic growth could be faster? Think you can do monetary policy better than Federal Reserve head Janet Yellen?
Then try “Chair the Fed,” a new online game that challenges your ability to manage an economy.
The game puts your hand on the interest rate lever and tests how effective you would be managing unemployment and inflation — and whether, as former Fed chair William McChesney Martin once said of the Fed’s central duty as a spoiler, you are ready to remove the punch bowl just as the party gets going.
The game was put online as a tool for economics and other students by the Fed’s San Francisco branch, available at www.frbsf.org/education/teacher-resources/chair-federal-reserve-economy-simulation-game.
“Our hope is that the ‘Chair the Fed’ game will inspire students of all ages to take an interest in monetary policy and its role in the US economy,” said Jody Hoff, director of education and outreach at the San Francisco Fed.
For hard-core gamers, the technology is ancient, but it gives a good idea of some of the challenges with the Fed’s mission.
As the newly appointed Fed chair, the player has to figure out if the momentum in inflation at, say, 2.3 percent, requires a pre-emptive rate increase, or how far to cut rates as joblessness edges above five percent.
As a rate decision is posed each quarter, you meanwhile are buffeted by alternating comforting and unnerving headlines: “Tight job market suggests more inflation ahead,” “Economy in contractionary spiral” or “Uncontrolled economic boom signals problems.”
The game gives you a Fed Chair’s normal four-year term to keep both joblessness and inflation stable, as is the Fed’s mandate.
When you fail — unemployment rockets to nine percent or deflation sets in — it delivers the humbling message: “Sorry. Because of disappointing economic results, you have not been reappointed.”