What I did on my summer vacation: Played with interest rates

What I did on my summer vacation: Played with interest rates.

ByABC News
February 11, 2009, 8:28 PM

CORALVILLE, Iowa -- Say "summer camp" to most people, and you'll conjure up images of canoeing, crafts, swimming, hiking, campfires and mosquitoes. But for a select group of teenagers in the Midwest this summer, camp means learning what it's like to be on the Federal Reserve.

In four sessions in Michigan, Illinois, Indiana and here in Iowa, high school students are spending two days indoors, taking notes on copies of PowerPoint slides as they study the economy, how Federal Reserve Chairman Ben Bernanke and his colleagues determine and execute interest rate policy, and the history of central banking in the USA.

And they're doing it by choice.

It's all part of a program from the Chicago Fed to prepare students to compete in the "Fed Challenge," a competition similar to a mock trial in which students give presentations on the economy, then make interest rate recommendations. The finals are held in Washington in the spring, where thousands of dollars in scholarship money is at stake.

Last week in a windowless, chilly Marriott hotel ballroom, 15 students and two high school economics teachers from two Iowa high schools attended the second Fed camp of the summer, taking time away from summer jobs, internships, traveling, home improvement projects and, well, sleep. It may be the only summer camp around where the dress code is "business casual" which in this group included flip-flops and toe rings.

Many of the students, such as Jenna Sedlacek, 17, a senior from Cedar Rapids, Iowa, said going into it that they weren't sure what the Federal Reserve was.

"I figured I'll give it a try; it can't hurt," says Holly Gilbert, 17, who will be a senior at Kennedy High School in Cedar Rapids in the fall.

Gilbert, captain of the swim team who is a life guard at the YMCA and took a marine biology trip to the Bahamas this summer, said her friends were a little confused as to why she signed up for the class.

"They were wondering, 'Why would you spend two days in a hotel in the summer when it's sunny?' " she says. The answer she gave them? "I'm not sure."

The students gave many reasons, including getting a leg up on their Advanced Placement Economics course, which many are taking when school starts next month, learning more about the Fed Challenge and learning what it takes to win much-needed scholarship money for college. Only one student said he had been "forced" into it by a parent.

Stephen Luth, 17, who will be a senior at Muscatine High School in Muscatine, Iowa, in the fall, chose to come on his own but readily admits one of the enticements of the program was that he heard the food was good. Still, "When I woke up this morning, I was thinking, 'What am I doing?' "