Measure how an inflation shock changes household purchasing power

What does this inflation tool estimate?

It compares purchasing-power impact between baseline inflation (for example 3%) and a higher shock scenario over a selected horizon.

Why include income growth?

Nominal wage growth can offset inflation pressure. Real income outcome depends on both costs and income compounding paths.

What is cumulative extra cost?

It is the sum of additional annual spending needed under the shock path versus baseline across the full horizon.

Is this equal to official CPI for every household?

No. It is a configurable scenario model. Actual inflation exposure varies by household spending mix and location.

How is real income gap calculated?

Projected nominal income at horizon minus projected annual spending under the shock inflation path.

Is this financial advice?

No. This calculator is for educational planning and scenario analysis.