And now...over to you
The Target Two Point Zero resource manual provides teams
with the foundations for their interest rate decision. It explains the main
ingredients of monetary policy and has provided teams with a framework for
thinking about the economy and inflation outlook. It will have given you many
things to think about - too much for one person, so it will be important for
team members to work together.
The resource manual does not cover everything that is potentially relevant to interest rate decisions, and it is not a blueprint for setting interest rates. But if your team became the Monetary Policy Committee tomorrow, it would hopefully give you enough of an idea of how to go about the job. You can, of course, approach the task from whatever angle you wish and investigate anything that you believe is important and relevant. You might not agree with the way the MPC goes about its job and the issues it identifies as being the most important. So how you undertake the task - the Challenge - is up to each team. We look forward to plenty of imagination and variety in the presentations.
We hope that all those people taking part will find the Challenge
as stimulating and rewarding as the members of the MPC find
it when they are setting the interest rate. Like them, you will
discover that there are areas where it will be difficult to
make a judgement and, in some cases, you will have to settle
for not knowing enough or not being able to reach a concrete
conclusion. That is all part of real-life decision-making. But
you must take a decision - there is no escaping that. If your
team's presentation is imaginative and well argued, you may
well win a regional heat and revisit your interest rate decision
- like the MPC - in an area final in February 2009.
But even if your team does not progress to the next stage, we believe every student taking part will find the experience rewarding, both in terms of their immediate studies and further ahead. Participating will provide you with a greater understanding of the economy and, we hope, some appreciation of what it is like to make a major decision that affects nearly everyone in the country in some way or another. You might even discover skills you did not think you had.
Good luck to everyone.
©2000-2009 Bank of England.
