Show controls

Levers

Monetary policy–

Money supply growth3.5 %/yr

tight moneyfast printing

How fast the central bank grows the money supply. Watch how long before prices notice, that lag is the whole game.

Helicopter money0 % of GDP

nonebig cash drop

A one-off cash drop straight to households. More inflationary than the same amount borrowed and spent.

Central bank rate4 %

0% · cheap to borrow40% · brutal

Set the policy rate by hand. Dragging this takes the wheel from auto-policy. Cut it and cheap borrowing heats up demand and inflation; raise it to cool them, with a lag.

Auto policy (Taylor rule)on

Supply side–

Supply shock0 pp

no shocksevere shock

An oil-style cost shock added straight to inflation. The 1970s ran on these. It fades over time.

Behaviour & perception–

Expectations sensitivity0.25 λ

slow to reactreacts fast

How fast people update what they expect inflation to be. Crank it and watch inflation feed on itself.

Central bank credibility0.8

not trustedfully trusted

How much people trust the target. High credibility keeps expectations anchored; lose it and shocks linger.

About this model and its limits →

Scenarios

🛒

Weekly groceries

$100.00

Year 0 · started at $100.00

0.0%Inflation

$100$100 now buys

4.5%Unemployment

Inflation over time

Inflation

–

Money M2

–

Output gap

–

Interest

–

Expectations

–

Velocity

–