Federal Reserve Board: The Next Generation

If President Bush is having trouble finding someone to fill Alan Greenspan’s shoes as Chairman of the Federal Reserve, he might want to extend his search to students at Pittsford Mendon High School in Rochester, New York. They even have experience in the job, having won the 10th Annual Fed Challenge.

The Fed Challenge is an academic competition providing high school students an insider’s view of how the Fed makes monetary policy. Participating students develop critical thinking, research and presentation skills as well as an interest in economics as a possible career. Competitions begin at the district and regional levels. The five student teams progress through the levels until four teams meet in Washington D.C. to stage mock Federal Open Market Committee meetings before Federal Reserve Governors and Reserve Bank Presidents.

In this year’s competition, which took place May 14 through 16, each team pondered the use of the phrase “measured pace” in the Fed’s next policy statement. In addition, students needed to maintain the Fed’s commitment to stable prices by raising the interest rate from the current level of three percent.

Federal Reserve Governor Donald Kohn declared the team from Pittsford Mendon High School the winners after he and other judges listened to the teams debating the pros and cons of retaining the phrase “measured pace” in the policy statement and the Taylor Rule which is the formula used to determine when to move interest rates. Also debated was the role of the non-accelerating inflation rate of unemployment as a predictive tool for monetary policy, as students strove to anchor the debate in the real world.

The debate may have been more lively and impassioned than many heard around the Fed’s imposing mahogany conference table. The judges felt that the discussion adhered to the broad contours of both the competition and other Fed discussions.

As the winners of this year’s Fed Challenge, the Pittsford Mendon team receives at $10,000 grant from competition sponsor Citibank to establish an economics laboratory at their high school. Each of the five team members – Kyle Adams, Ahrash Dianat, Keah Kalantari, Anna Suozzi, and Raymond Ming Zhong – will also receive a $7,000 Citibank Scholarship for the Fed Challenge. Richard Sattora, the team’s faculty advisor, will receive a $5,000 Fed Challenge Grant from Citibank as well.

In addition, Citibank awarded $25,000 to each of the national finalist teams and national semi-finalist teams received $10,000 each.

National Finalists teams were from:

  • Franklin High School, El Paso, Texas
  • Shaker Heights High School, Shaker Heights, Ohio
  • Urbana High School, Frederick, Maryland

National Semi-finalist teams include:

  • Choate Rosemary Hall, Wallingford, Connecticut
  • Marquette High School, Chesterfield, Missouri
  • University School, Milwaukee, Wisconsin
  • Westside High School, Omaha, Nebraska
  • “The Fed Challenge has been a very exciting experience for our team,” Richard Sattora, faculty advisor to the Pittsford Mendon High School team said. “It’s a wonderful way to get students excited about economics. Right now we’re not even thinking about the money from Citibank’s Student Loan Corporation, but it can make such a difference in helping students handle college expenses, and I’m eager to put the grant money we earned to use promoting economic education throughout our school.”

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