Are you curious about how major hurricanes affect the U.S. economy, or maybe fascinated by interest rates and their effect on the housing market? Does the relationship between monetary policy and inflation grab your attention?
If so, you’d find kindred souls on the student Federal Reserve Challenge team.
A dozen economics
majors spent all their spare time this fall researching the factors that influence the federal funds target interest rate as if they were members of the Federal Reserve’s Open Market Committee. Then they analyzed those factors and formulated an argument calling for the Fed to increase the rate on loans between financial institutions.
The UML team presented Nov. 3 at the Federal Reserve Bank of Boston for the Northeast regional division of the college Federal Reserve Challenge. They competed against teams from Ivy League colleges and business schools including Bryant and Bentley universities.
Yale won its bracket and Harvard won the regional competition. But the UMass Lowell students learned a lot – thanks in part to their new advisor, Asst. Prof. Brendan Epstein
, a former senior economist at the Board of Governors of the Federal Reserve System in Washington, D.C.
Epstein says that all professional work in economics requires learning by doing, even for people with doctorates, and the Federal Reserve Challenge provides that kind of hands-on experience.
“My intention is that the students will gain skills they can apply in a professional environment – skills like disciplined economics research, public speaking, being efficient with their time allocation and, most importantly, how to go beyond the basics of data analysis to put results in context,” he says.
During the competition, each team gets 15 minutes to present the economic data they considered, their analysis and an interest rate recommendation. Then the judges question them for another 10 minutes.
“Fifteen minutes seems like a lot of time, but it’s not,” says senior Raffah Siddiqui, an economics major and finance minor. “The real Fed does this in a couple of hours, with a break for lunch.”
The team's information needs to be up-to-the-minute. For example, new employment figures were released the day of the competition and had to be incorporated, says Sam Klett, a junior economics major competing for the first time.
“We had to adjust what we wanted to present,” he says. “We had to find totally new data that was more relevant, because things are always changing.”
Alessandra Greco, a senior economics major with minors in labor studies
, was the only team member besides Siddiqui to compete last year. She loves the practical experience.
“Sitting in class, you can get really far removed from all the material that’s being thrown up on the board,” she says. “We have the opportunity to take everything we know and apply it to a real situation.”
This fall, Greco and Siddiqui emerged as natural leaders on the team because of their previous experience competing. All the students researched topics ranging from wages to international trade to the economic impact of Hurricanes Harvey and Irma, then met twice a week to discuss their research and practice presenting it with Epstein and the other team members.
Two underclassmen were selected for the team of five that did the final presentation at the Boston Fed, and two more attended as alternates and observers. Greco and Siddiqui considered this a building year.
“If you’re new to the competition, you don’t know what to expect,” says Siddiqui. “We hope that in coming years, we can win our bracket.”
Olivia Cheung, a sophomore honors
student double-majoring in economics and biomedical engineering
, found the competition terrifying, but said she would do it again next year, this time with more preparation.
Danyel Pollock, a senior economics major with minors in marketing
, says she was nervous going in, but ended up enjoying the experience.
“It was really a rush to be on the team and speaking, and it was validating whenever we could see the judges agreed with us or could follow our line of reasoning,” she says. “We learned how to form a very clear argument with highly technical information.”
Klett, a junior economics major, says the experience taught him how much he didn’t know and how to go deeper in his analysis.
“I’ve always liked economics, and I used to think I knew a considerable amount on the subject,” he says. “I learned a lot more from this, and I really enjoyed that.”
Epstein says the group will continue meeting all year to start preparing for next year’s challenge – and new members are always welcome.