Rutgers team places second in nationwide economics competition

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Predicting how Rutgers University will fare at the annual economic and financial competition of the Federal Reserve is easier than choosing a winner in the stock market.

Predicting how Rutgers University will fare at the annual economic and financial competition of the Federal Reserve is easier than choosing a winner in the stock market.

For the third time since the Fed Challenge competition started, Rutgers–Newark placed in the top three, last week falling short only of Harvard University, which took top honors.

“The questions that the judges in the New York finals asked were by far the toughest to answer,” senior economics and mathematics major Victor Castaneda said of the regional round of the competition. “We were overly prepared to answer the question, ‘What are the mechanisms (through) which large-scale purchases impact markets’ — but they flipped the question and threw us off. We struggled, but we still came in first and went to finals.”

In the competition, students acted as members of the Federal Open Market Committee — the Fed’s monetary policymaking body — and made a policy recommendation through an analysis of current economic and financial data concerning the federal funds rate, as well as major monetary issues faced by the Fed today. As part of its presentation, a panel of Fed members grilled the teams on their knowledge of macroeconomics and financial operations, in addition to their policy recommendations.

The team — led by faculty adviser and economics department chair John Graham — began reading Federal Open Market Committee minutes and board speeches in July to prepare for the competition’s preliminaries in September. Castaneda, who has competed in the competition for three consecutive years, originally was drawn to the Fed Challenge team in Graham’s Intermediate Macroeconomics course — his first class at Rutgers.

“Being a part of the competition makes me want to get into the Federal Reserve after I graduate this spring,” Castaneda said. “You might think the most valuable thing I took away from this was knowledge about macroeconomics, but what I really gained was the skill of putting together a presentation and improving my public speaking. Those are things I’ll carry with me throughout my career.”