So, there's a new game on Steam called Federal Reserve Simulator. I actually got an email from the game's creator, offering me a product key to test out the game. I didn't respond at first, but then I saw a post about it on SN (#1445690) and figured, well why not give it a shot.

So I emailed the creator back and got a product key to play the game for free! I spun it up on Steam and was greeted with this main menu:

Being not the type of person to directly jump into things, I first clicked "How to Play", and then "Fedcyclopedia". I really liked the Fedcyclopedia and its educational pages, including this one about the tradeoff between fixed exchange rates, independent monetary policy, and free flow of capital:

There isn't too much in the Fedcyclopedia, but what is there is at just the right level of detail to educate the player without being too technical. In addition to the entries they do have, I would have appreciated some brief articles about the Fed in each of its historical periods and under each Fed chairman.

But anyway, onto the game. The game itself is basically a turn based management game. It consists of adjusting your monetary policy levers, clicking "end turn", and monitoring inflation and unemployment to keep within the Fed's mandate of 2% inflation and 4% unemployment. There is also a "credibility meter", which affects how influential your policy announcements are. Occassionally, historical events outside of your control, like the oil crisis in the 1970s, will affect the general trajector of the economy, forcing you to respond. These events are not random--they follow real historical timing, and thus as the player you actually have an advantage over the real Fed, since you can foresee events before they happen. Each turn is a quarter, and the default game style is for you to play 30 years (120 quarters) as the Fed chairman. Your performance is then compared to the historical performance of the Fed over that time period.

Here was the performance in my first game, which I thought was surprisingly good, given that I basically did nothing for the first 80 turns (20 years) of the game. I did nothing because it seemed to be working. Maybe that's what the Fed should do most of the time... nothing, ~lol.

One thing I thought was weird was that when I entered into the 60s, the game told me that there was going to be massive government spending from the Great Society. But since inflation and unemployment were pretty stable, I continued to do nothing, and it worked. It wasn't until the mid 70s, during the various oil crises, that inflation started getting out of control and I was forced to jack up interest rates. You can see from the left hand chart that my Fed Funds rate was basically constant until the late 70s, and then I started cranking it up. You can see from the right hand chart that I actually managed inflation pretty admirably until the mid 70s.

For that first game, I played with two levers only: the Fed Funds Rate and the Discount Rate. There are a couple of other levers you can play with, like making announcements, setting bank reserve requirements, and quantitative easing/tightening. I didn't really adjust those levers because I didn't really understand how they'd work, or in what scenarios I'd prefer to use them. I think maybe the time period that I played through, 1950-1980, it wasn't really necessary, and that those tools are more appropriate for managing crises in the 90s and 2000s.

Anyway, it was kind of a fun(?) game. I imagine most people won't find it fun in the traditional sense of the word, because you're just adjusting numbers, clicking end turn, and then watching some other numbers change. There isn't really a political or dramatic dimension to it... like they don't simualte a president breathing down your neck, or people protesting outside your building, for example. But it was fun in the sense that I never really had a sense of what it's like to be in the Fed cockpit, despite being an economist, since I'm not a macroeconomist and I've never worked for the Fed. It was nice to see all the policy levers the Fed has access to laid out, and how they affect outcomes like inflation, unemployment, and GDP growth, though I can't comment on how accurately they modeled the effects. The other part that was cool was that when the oil crises of the 1970s hit, you felt real panic ensue because inflation starts going through the roof, and you're not entirely sure how high you have to raise rates to fight that without wrecking the economy.

If the developers had the time and budget, I would recommend them to:

• Add music that goes along with the era and the feeling. Calm music when things are calm, tense music when things get tense.
• Add some political drama into the mix, even if it's just in the form of newspaper headlines criticizing or praising the Fed.
• Add more Fedcyclopedia entries, especially about the Fed in different eras and under different chairmen.
• Add some FOMC drama into the mix too. In the game, you set the policy, but in reality it's the FOMC that sets it by a vote. What if you have to deal with recalcitrant board members?

So, here's my overall breakdown of the game:

Pros:

• Puts you in the Fed cockpit. Educational as to what policy levers are available to the Fed and how they affect economic outcomes.
• You get a real sense of historical tension at times, as world events cause the economy to spiral out of control.
• I love how they compare your record to the historical record, it gives you something to shoot for.

Cons:

• Not much gameplay in the traditional sense of the term. This is more of an educational product than a game.
• Audio and visuals are pretty bare bones.
• I would have liked more feedback about your decisions (newspaper articles, opinion pieces, complaining board members, etc.) beyond just the GDP, unemployment, and inflation numbers. That kind of feedback could not only add to the drama, but it could be educational as to how people view different policy levers.

The game costs $3 on Steam. It's worth a try if you want to experience what it's like to pilot the Fed.