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Winning the Fed Challenge
This article originally appeared in the Bentley Magazine.
With a firm grasp of U.S. monetary policy and a keen ability to think on their feet, Bentley undergraduates walked away with top honors in a national competition sponsored by the Federal Reserve System.
Finals for the seventh annual College Fed Challenge took place in Washington, D.C., on November 30, 2010. The Bentley team placed first among peers from Lafayette College, Northwestern University, Rutgers University at Newark, and Virginia Commonwealth University. The earlier regional contest saw Bentley prevail in a field of 18 schools that included MIT, Harvard and Yale.
The competition casts students as economists for the Federal Open Market Committee, which crafts monetary policy for the Fed. Teams deliver a presentation centered on a recommendation regarding the national interest rate and other policy tools the Fed may be using. A panel of Fed economists rates participants on economic analysis, responses to questions, teamwork and presentation.
The eight-member team took part in a semester-long course to prepare. Curriculum architects were Professor of Economics David Gulley and Associate Professor of Economics Aaron Jackson.
The win is “a tremendous accomplishment for our students and Bentley,” says Gulley, who joined Jackson in receiving the university’s Innovation in Teaching Award for their work.
In a series of workshops and debates, course participants mined the complexities of monetary policymaking. Topics such as the federal funds target were new ground for most.
“I knew macroeconomics, but not much about financial markets – other than who Ben Bernanke is,” says David Norrish ’11, who graduated in December with a BS in Managerial Economics. “There were debates in every class, so you had to know the topics inside out.”
Dash of Drama
Evaluations by the two professors and students themselves determined which five team members would face Fed Challenge judges. The group then set to work on a script for the presentation, along with charts, graphs and other illustrative material. Their topic: the Fed’s current policy of quantitative easing.
“Two students played monetary doves, favoring quantitative easing to increase the money supply in hopes of stimulating the economy,” reports Norrish. “Two other team members were hawks – skeptical of an expanded Fed role in economic affairs.”
Presenters Norrish, Christine Harstad ’11, Satyajeet Jadhavrao ’12, Pranay Kumar Jain ’12 and Peter Jurik ’11 ran through the script until they knew their parts cold.
“We wanted to have a back and forth among ourselves, to add drama and keep the interest of judges, who had been hearing statistics all morning,” says Harstad, an Economics–Finance major who joined the Financial Leadership Development program at Raytheon after her December graduation. She moderated the exchange between the hawks and doves.
There was a dash of drama behind the scenes, too, as team members dug deep after two consecutive all-nighters of preparation. “About 15 minutes before we presented, a new report came out,” recounts Norrish. “I was able to send it to everyone’s iPad.”
The students’ final course assignment was a report they dubbed Advice for the 2011 Fed Challenge Team. The paper cites timely and relevant data, and insightful economic analysis, as prime factors for success. And it offers this nod to showmanship: “Make [the presentation] entertaining. People remember how you made them feel more than what you actually said.”
Bentley has competed in the College Fed Challenge since 2007. The previous high-water mark was a second-place finish at the regional level, in 2009.
The Black United Body fashion show, organized and put on by students, provides an outlet for students' fashion creativity and highlights on-campus diversity at Bentley.