Data sources
1. Inflation (CPI) data — World Bank
Indicator:
FP.CPI.TOTL.ZG — Consumer prices, annual % change.
Coverage: ~190 countries, 1960–2024.
Stored locally as
cpi-inflation.json. No live API calls are made — the site works entirely offline from this file.
2. Exchange rates — World Bank
Indicator:
PA.NUS.FCRF — Official exchange rate (LCU per US$, period average).
Coverage: ~214 countries, 1990–2024.
Stored locally as
exchange-rates.json. Used for the LCU/USD toggle — each year's amounts are converted at that year's average exchange rate, not a single current rate.
3. Currency codes
ISO 4217 currency codes and names are mapped by country (e.g. Georgia → GEL / Lari, Turkey → TRY / Lira). This mapping is embedded in the calculator code.
Methodology
Inflation tax rate
= π / (1 + π) — the classic formula for the fraction of purchasing power extracted by inflation each year.
Example: with 58.5% inflation, the inflation tax rate is 0.585 / 1.585 =
36.9% — that share of every unit of income is silently taken.
This is not a government-imposed tax but an economic effect: rising prices erode the purchasing power of money holders, transferring real value to money issuers.
Inflation took (absolute amount)
= Income × (π / (1 + π))
When a raise is entered: = Income × (1 + r) × (π / (1 + π)), where r = nominal raise rate.
This is the absolute amount of purchasing power silently extracted from your income in local currency (or USD when toggled).
Real raise — Fisher equation
Real raise = ((1 + r) / (1 + π)) − 1
where r = nominal raise rate, π = inflation rate.
Example: +8% nominal raise with 10% inflation → (1.08 / 1.10) − 1 =
−1.82% real raise — you can actually buy less than before despite a pay rise.
Real income
= Income × (1 + r) / (1 + π)
The purchasing power of your nominal income after accounting for price level changes. If this is less than your starting income, you have effectively lost ground.
Cumulative inflation tax
For each year from the selected start year to the latest available, the calculator computes that year's inflation tax on the income you entered for that year, then sums across all years.
Total inflation tax = Σ [ Income_year × (π_year / (1 + π_year)) ] for each year.
The percentage shown is the total tax divided by total income across all entered years.
Monthly / Yearly input
The monthly/yearly toggle controls how you enter income. If you select "monthly" and type 5,000, the calculator multiplies by 12 to get annual income (60,000) and all results are displayed as annual amounts. This ensures consistency regardless of input preference.
USD conversion
When the USD toggle is active, all amounts are converted from local currency to US dollars using the World Bank's official average exchange rate for that specific year (PA.NUS.FCRF). In cumulative mode, each year uses its own exchange rate — this means the USD figures reflect the actual dollar value at the time, not today's rate.
Limitations & notes
• CPI measures average consumer price changes — your personal inflation rate may differ depending on your spending basket.
• The "inflation tax" is an economic concept, not a literal government tax. It describes the loss of purchasing power that benefits net debtors (including governments that issue currency).
• Exchange rates are period averages, not end-of-year or spot rates. For countries with capital controls or multiple exchange rates, the official rate may not reflect market reality.
• Some countries have data gaps — years with missing CPI or exchange rate data are excluded from calculations.
• All data is stored locally and loaded from static JSON files. No external API calls are made at runtime — the website functions fully offline.