Taylor Rule: Central Bank Interest-Rate Stability

Every modern central bank sets its policy rate roughly the way the Taylor Rule describes: a baseline real rate, plus extra tightening in proportion to how far inflation sits above target and how far output sits above trend. This simulator renders that rule as a 3D bar surface over the inflation-gap / output-gap plane, then drops a simulated economy onto it and lets a simple IS-curve/Phillips-curve feedback loop run quarter by quarter. Set the inflation-response weight below the Taylor principle's threshold of 1 and a shock that should fade instead spirals outward — the same instability argument John Taylor made about real-world monetary policy, made visible as geometry instead of algebra.