"Economics 101 FOMC Simulation Details"
Economics 101 Mock FOMC Meeting Spring 2008 Our mock FOMC meeting is scheduled for Monday, April 21st, at 8 PM in our classroom. Please put this date on your calendar. Attendance is required unless you have a binding commitment that you cannot avoid. There will be no morning class that day. Each team will have a spokesperson (look nice) who will represent their FOMC member, sit up front, and make a 5-7 minute PowerPoint presentation. In these presentations you will comment on current economic conditions and the economic outlook. This is called the Outlook Go-Round. When the presentations are over we will ask each spokesperson what their policy recommendation is for the federal funds rate and what their rationale is. This is called the Policy Go-Round. Chairman Bernanke will go last and will summarize the FOMC’s decision. Each team is also responsible for handing in a written copy of their PowerPoint comments along with their PowerPoint slides that evening. Below are some sources of current economic data. The presentations are meant to be as up to date as possible. Hence it is best if they can include new information not available at the last FOMC meeting. The last FOMC meeting before our simulation is next week: March 18th. The minutes from that meeting should be released April 15th. Check them out when they become available so that you can see what information the FOMC had for their last meeting and how things might have changed since then. The next real FOMC meeting after our meeting will be April 29th or 30th, so it will be interesting to see if they recommend the same policy our class does. Some Resources 1. Beige Book: http://www.federalreserve.gov/fomc/beigebook/2008/default.html This is a valuable resource for the FOMC compiled by Fed economists 8 times a year. It has detailed information by district and a summary for the whole economy. 2. National Income Data: http://www.bea.gov/ All the latest data on GDP, trade, profits, personal income, etc. 3. More National Data: http://www.whitehouse.gov/fsbr/esbr.html White House Economic Statistics briefing room with data on output, prices, income, production, and money. Just be careful: some series are not updated and are old. 4. Bureau of Labor Statistics: http://www.bls.gov/ Latest statistics on inflation, wages, productivity, etc. 5. Federal Reserves Statistics: http://www.federalreserve.gov/releases/ Latest data on money supply, interest rates, consumer credit, industrial production, capacity utilization, and bank assets and liabilities. 6. Treasury Yield Curve: http://www.ustreas.gov/offices/domestic-finance/debt- management/interest-rate/yield.html Daily Treasury yield curve with interest rates on all short and long-term Treasury bonds. 7. Department of Energy Statistics: http://www.eia.doe.gov/ Oil prices, oil stocks, oil imports, oil consumption, and predictions. 8. Leading Economic Indicators: http://www.conference-board.org/ Consumer confidence index, leading economic indicator index, CEO confidence survey. 9. Realty Statistics: http://www.realtor.org/ Just click on the Research category on the left. Housing statistics, economic indicators and forecasts. 10. Census Bureau Housing Statistics: http://www.census.gov/ Just click on the Housing category. Housing starts and permits. 11. Philadelphia Fed Forecasts: http://www.philadelphiafed.org/econ/ Both the Livingston Survey of economists’ expectations and the Survey of Professional Forecasters predictions. 12. Congressional Budget Office: http://www.cbo.gov/ Latest federal budget data and projections from a fairly objective source. 13. St. Louis Fed Database: http://research.stlouisfed.org/publications/ Tons of current data and nice graphs on everything from the money supply and oil prices to exchange rates and employment costs. Econ 101 Team Preferences for the Mock FOMC Meeting Team: __________________________________________________________ Please hand this in in class on Wednesday, March 26thth. Only one per team. 1. Identify your top four choices from the following list of people who can vote at the FOMC meeting: (1 being top pick) Governor Ben Bernanke (Chair: Board and FOMC) ______ President, New York Fed, Timothy Geithner (Vice-Chair: FOMC) ______ Governor Donald Kohn (Vice Chair: Board) ______ Governor Randall Kroszner ______ Governor Fred Mishkin ______ Governor Kevin Warsh ______ President, Dallas Fed, Richard Fisher ______ President, Cleveland Fed, Sandra Pianalto ______ President, Philadelphia Fed, Charles Plosser ______ President, Minneapolis Fed, Gary Stearn ______ A few things to keep in mind: Bank presidents comment on regional economic conditions as well as national. If you have a particular interest in some region in the US, you might prefer that bank president to a Board member. Regional banks have different foci. So the Dallas Fed is more concerned with oil prices. The New York Fed handles all international transactions, so they might pay more attention to international factors. Regional banks also have different traditions. For instance, the St. Louis Fed is considered the monetarist Fed, while the Minneapolis Fed is more linked to the counter-Keynesian rational expectations revolution of the 1970s. Board members and bank presidents also have different personalities. Some are considered inflation “hawks”, others inflation “doves”. You may want to research those personalities and to consider representing the personality of your FOMC member in your presentation.