Taylor Rule Calculator

Estimate the optimal central bank interest rate based on inflation and output gap using the Taylor Rule formula.

Economic Parameters

Equilibrium Real Rate (%)

Current Inflation (%)

Target Inflation (%)

Output Gap (%)

Recommended Rate

Inflation Gap

Equilibrium Rate (r*):

Current Inflation:

Inflation Adjustment (0.5 x gap):

Output Adjustment (0.5 x gap):

i = r* + pi + 0.5(pi - pi*) + 0.5(y - y*)

Where r* = equilibrium rate, pi = current inflation, pi* = target inflation, (y - y*) = output gap.

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