2020 Math Modeling Fed

Academics

Math Students Study COVID-19 Economic Impact

Seniors in Math Modeling applied the real-time COVID-19 crisis news and economic fallout to learn about the principles behind the Federal Reserve, and how the federal government uses its financial abilities to keep the economy stable.

“The most interesting thing for me has been learning about governmental economic structures because it's incredibly relevant to the times we're living in,” says Alex S. ‘20. “We literally learned about the Fed and interest rates as they dropped to zero percent in real-time.”

As the Northwest School segued to remote learning due to the COVID-19 crisis, teacher Alex Chen reformatted his class to a 50/50 split between economic theory (specifically, the Federal Reserve, interest rates, and inflation) and how that theory is playing out with current events.

The federal reserve has two mandates, according to Alex: to keep both unemployment and inflation low. To put the mandates into practice, students used a Federal Reserve simulator, which included events such as crashing oil prices or housing booms. Students adjusted the federal funds in response. If they adjusted too slowly, they discovered inflation run rampant and then they spent their entire simulation trying to control inflation. If students didn’t adjust rates accordingly, they found unemployment went up.

Abbott P. ‘20 was one of only three students in the class to “win” the simulation. He says he started the class having little idea what the Federal Reserve accomplished, or what it meant whenever the Fed was mentioned in the news.

“There is a direct synergy between what we are learning in class and what is happening in real life, and it makes this class so appealing,” says Abbott. “I find myself thinking about it all the time.”

For math teacher Alex Chen, the real-time reflection in the class has been a thrill, both in preparing his content and reacting to changes as they happen. Alex says he is trying to stay as current as possible in his lessons, which sometimes means changing his PowerPoint slides 15 minutes before class starts. The work has paid off, however. When the Federal Stimulus Bill was announced, the class was able to analyze its contents the following morning, in real time.