🏛️ FREE INTERACTIVE GAME
Federal Reserve Simulator
Step into the shoes of the Fed Chair. Set interest rates, manage inflation, and navigate economic crises. How well can you steer the economy?
Choose a Historical Scenario
What is the Federal Reserve Simulator?
The Federal Reserve Simulator is a free interactive game that puts you in the role of the Chair of the Federal Reserve. Make real monetary policy decisions — setting interest rates, issuing forward guidance, and deploying quantitative easing — while navigating historical economic crises like the 2008 Financial Crisis, COVID-19 pandemic, the Dot-Com Bubble, and 1970s Stagflation.
Our simulation uses a simplified IS-LM-PC economic model calibrated to real US economic data. Every decision you make affects GDP growth, unemployment, inflation, consumer confidence, and the stock market. The challenge? Balancing these competing forces to achieve stable growth with low inflation and low unemployment — the Fed's dual mandate.
How to Play the Federal Reserve Simulator
- Choose a Scenario — Select from historical economic crises, each with unique starting conditions and events.
- Set Interest Rates — Adjust the federal funds rate each quarter. Raising rates fights inflation but slows growth. Lowering rates stimulates the economy but may cause inflation.
- Issue Forward Guidance — Signal your future intentions to markets. Hawkish guidance tightens financial conditions; dovish guidance loosens them.
- Deploy QE (Optional) — Buy bonds to inject liquidity when rates are near zero. Powerful but increases national debt.
- Navigate Events — Respond to crises, booms, and external shocks as they happen.
- Get Your Score — After 12 quarters, see how well you managed the economy compared to the Fed's targets.
Understanding Monetary Policy
- Federal Funds Rate — The interest rate at which banks lend to each other overnight. The Fed's primary tool for influencing the economy.
- Forward Guidance — Communication about future policy intentions. Shapes market expectations and long-term interest rates.
- Quantitative Easing (QE) — Large-scale asset purchases to lower long-term rates when short-term rates are near zero.
- Dual Mandate — The Fed's two goals: maximum employment and stable prices (2% inflation target).
- Phillips Curve — The trade-off between unemployment and inflation. Lower unemployment often means higher inflation.
Frequently Asked Questions
Is the Federal Reserve Simulator free?
Yes! It's completely free with no registration, downloads, or hidden fees. Play as many times as you want.
How realistic is the economic model?
Our model is based on the IS-LM-PC framework used in economics education, calibrated with real US economic parameters. While simplified for gameplay, it captures the key dynamics of monetary policy transmission.
Can I use this for economics classes?
Absolutely! Many economics professors use simulations like this to teach monetary policy. The game covers interest rate mechanics, the Phillips Curve, QE, and forward guidance — all core concepts in macroeconomics courses.
What scenarios are available?
Currently we offer four historical scenarios: the 2008 Financial Crisis, COVID-19 Pandemic, Dot-Com Bubble, and 1970s Stagflation. Each presents unique challenges and economic conditions.
How is my score calculated?
Your score is based on how close you get to the Fed's targets: 2% inflation, unemployment below 5%, positive GDP growth, and economic stability (avoiding wild swings). Maximum score is 100.
Does it work on mobile?
Yes! The simulator is fully responsive and works great on phones, tablets, and desktop computers.