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What you keep on Free
This model uses static comparative statics -- no genuine time axis exists.
A positive demand shock opens a positive output gap, raising inflation along the NKPC.
An adverse supply disturbance (e.g., oil price spike) shifts the NKPC upward.
Expected inflation drifts above target, feeding back into current inflation.
Diagram, readouts, and summary update with each change.
Structural
State
Shocks
Impact summary
Current inflation
Inflation
1.98
Output gap
0.00
Expected inflation
2.00
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