Taylor Rule Calculator
Result
Taylor Rule Calculate Fed interest rate using Taylor Rule. Formula: Target Rate = 2% + Inflation + 0.5×(Inflation Gap) + 0.5×(Output Gap). — free online calculator.
Formula
- Taylor Rule Calculator calculates its result from Inflation Rate (%), Inflation Target (%), Output Gap (%). It uses the formula Target Rate = 2 + Inflation + 0.5×(Inflation - Target) + 0.5×(Output Gap). Change any input to recalculate the result instantly.
- The main inputs are Inflation Rate, Inflation Target, Output Gap. Enter them in the units and format shown in the calculator.
- Use monetary amounts, rates and time periods exactly as labeled; the result reflects the assumptions entered on this page.
- Changing any input above recalculates the result with the same calculation engine used by this page.
Example: Taylor Rule
- Inflation Rate: 2.5 %
- Inflation Target: 2 %
- Output Gap: 0.5 %
Using Inflation Rate (%) = 2.5, Inflation Target (%) = 2, Output Gap (%) = 0.5, the calculated result is 5.
Sample result: Calculating…
Frequently asked questions
What does the Taylor Rule calculate?
Taylor Rule Calculate Fed interest rate using Taylor Rule. Formula: Target Rate = 2% + Inflation + 0.5×(Inflation Gap) + 0.5×(Output Gap). — free online calculator.
Which values should I enter?
Enter Inflation Rate, Inflation Target, Output Gap using the units and format shown beside each field.
What formula does this calculator use?
The calculator uses the following relationship: Target Rate = 2 + Inflation + 0.5×(Inflation - Target) + 0.5×(Output Gap).
Why might my result differ from another source?
Results can differ when another source uses different units, rounding rules, conventions or assumptions. Compare the inputs and definitions before comparing results.
Does the result update automatically?
Yes. Changing an input updates the result using the same calculation engine shown on this page.