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When U.S. Federal Reserve chair Ben Bernanke speaks, people listen: His words can and do move financial markets around the world. But James DeVault doesn’t remember a thing he said. That’s how excited the Lafayette contingent was when Bernanke congratulated the champions of the 2009-10 College Fed Challenge.
DeVault and Julie Smith, associate and assistant professor, respectively, in the economics department, were advisers to a six-student team that outdid Harvard, Northwestern, and Rutgers-Newark Dec. 2 in a simulated meeting of the Federal Open Market Committee at the Federal Reserve Board in Washington, D.C. This was the title round of the College Fed Challenge, a competition sponsored by some of the nation’s Federal Reserve banks to encourage better understanding of the U.S. central bank, the forces influencing economic conditions in this country and abroad, and the ways the economy affects everyone’s lives.
Bernanke had joined the Fed Challenge finalists moments before the judges announced the order of finish beginning with No. 4.
It did not surprise DeVault when Northwestern was announced as the fourth-place team, he says, but when Harvard was called next, “I thought, ‘Oh, my God, we really have a chance to win this thing!’ And when we won, I was in total shock.” So much so that he can’t recall what Bernanke said as he handed the championship trophy to Teevrat Garg ’10 and posed for photos with the team.
“You have to really understand and be passionate about the material,” Garg says. “If you can’t do that, it’s not rewarding…This reflects that the best at Lafayette can compete with the best of everyone.”
(For other recent top finishes by Lafayette students in national competitions, see the bottom of this article.)
FIRE IN THE BELLY
Several years earlier, Lafayette had advanced to the championship round and placed third. This year, more than 80 colleges participated nationally, with Lafayette taking the $25,000 top prize. The students split $15,000 of it, and the rest went to the economics department to fund future Fed Challenge teams and other projects.
“It’s not just about brainpower,” DeVault says. “Interpersonal skills are important. [The students] also have to be cool under fire and speak well. Enthusiasm is just as important as academics. They need that fire in the belly.”
“We tried to get the students to think like economists. They have to talk about costs and benefits and realize the difficulties faced by policy-makers,” Smith says. “I was happy and excited for them. It means a lot to me, but it means more to them because of their preparation.”
Beginning in September, the team met as a class three times a week to prepare for the first competition in Baltimore. By October, it was meeting nightly. The students read speeches from the Fed’s Board of Governors, prepared questions for one another, collected and discussed data and research, and wrote a script for the presentation they would give at the competition. Scott Placke, director of the College’s Forensics Society, gave them suggestions for making the presentation more passionate, exciting, and persuasive.
Garg, of Haryana, India, was the only two-time member of Lafayette’s Fed Challenge team. He also had helped lead the Forensics Society’s speech team to a championship at the National Forensics Association’s national tournament last May.
For Dylan McNamara ’11 (Pasadena, Md.), the trip to the Fed’s Washington headquarters was a repeat visit. His team at Severn School had advanced to the final round of the high school competition. He cites that experience as the reason he pursued economics at Lafayette and joined the Fed Challenge here. The other members of the team were Chencong Bao ’11 (Shanghai, China), Alex Petroulias ’11 (East Quogue, N.Y.), Nick Stacey ’11 (Mbabane, Swaziland), and Dan Stefan ’10 (Havertown, Pa.)
“We didn’t know each other well at the start, but we got to be close friends,” Garg says. “There was a lot of synergy on the team.”
BALTIMORE, RICHMOND, WASHINGTON
Even those who understand little about the workings of the Federal Reserve felt the impact of the decisions it made last year at the height of the economic crisis. The central bank influences everyone’s day-to-day lives, whether they realize it or not.
“Its job is to determine credit, monitor borrowing and lending, and determine interest rates,” DeVault explains. “Its decisions have global ramifications, as they can affect other interest rates around the world.”
In response to the economic downturn, the Fed created new lending programs to stimulate the economy. With frequent policy changes taking place, there was an enormous amount of new material for the students to absorb, including speeches and meeting minutes.
In the Fed Challenge, teams give 20-minute presentations on monetary policy and are judged on content, teamwork, responses to questions, presentation, and style. In the first round, at the Baltimore branch of the Federal Reserve Bank of Richmond, Lafayette defeated 14 schools, including American, Lehigh, and the Naval Academy. The team went on to defeat James Madison and the University of North Carolina, Chapel Hill, to win the Fifth District regional competition in Richmond and advance to the championship round.
At the final, McNamara was confident about Lafayette’s presentation. “I was surprised at how calm I was going into it,” he says. “I was a little nervous at first, but once we started, I was OK.”
While the presentation was important — You don’t get to that level of competition unless you have a superb presentation,” DeVault says — it was the Q-and-A that set Lafayette apart and sealed the victory. The teams were asked two common questions plus other questions specific to their presentations. One of the common questions was particularly challenging, DeVault says, but Lafayette “hit it right out of the park.”
Smith says that’s when they realized they stood a real chance of winning, “although it was difficult to gauge the reactions of the judges,” who included a senior economist and policy adviser at the Boston Fed, a senior vice president of the New York Fed, and a senior vice president and director of research at the Richmond Fed. “I knew our students did well, and it was sometimes a struggle for the other teams, but there was still uncertainty.”
HARVARD: “PRETTY GOOD”
“I thought Harvard’s presentation was pretty good, but when they were announced in third place, I knew we’d won,” Garg says. He called economics department head Ed Gamber, and news of the team’s success spread on campus. “It was on the department web site before we’d even returned to Easton,” he says. “We had so much support from the College.”
The challenge now is to hold on to the title. McNamara already plans to return to the team for his senior year. He is working with DeVault and Smith to restructure the class to begin at the end of the spring semester, rather than the beginning of fall.
“It’s good to start earlier, because the team will get to know one another and have time to get used to working together,” McNamara says. “It will make our team more competitive.”
Other recent top finishes by Lafayette students in national competitions include: