Institutional Benefits from Implementing Inflationary Targeting

Abstract: The paper presents evidence that inflationary targeting is beneficial to economies, as they receive additional institutional support from International Monetary Fund (IMF). Contents analysis of IMF Article IV reports in the years 2001-2013 supports a claim that IMF strengthens institutional framework of inflationary targeters disproportionally to other economies, by providing more accountability, oversight and policy advisory. The acclaimed macroeconomic performance of inflationary targeting economies is not only achieved through technical superiority of the monetary regime itself, but also benefits from their advantaged position in the international community.