Athanasios Orphanides (born 22 March 1962) is a

Cypriot Cypriot (in older sources often "Cypriote") refers to someone or something of, from, or related to the country of Cyprus. * Cypriot people, or of Cypriot descent; this includes: **Armenian Cypriots **Greek Cypriots **Maronite Cypriots **Turkish C ...

economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...

who served as Governor of the

Central Bank of Cyprus The Central Bank of Cyprus ( el, Kεντρική Τράπεζα της Κύπρου tr, Kıbrıs Merkez Bankası), is the central bank of the Republic of Cyprus, located in Nicosia. It was established in 1963. Its current Governor is Constantino ...

between 3 May 2007 to 2 May 2012 and as a member of the Governing Council of the

European Central Bank The European Central Bank (ECB) is the prime component of the monetary Eurosystem and the European System of Central Banks (ESCB) as well as one of seven institutions of the European Union. It is one of the world's Big Four (banking)#Intern ...

between 1 January 2008 and 2 May 2012. Prior to his appointment as governor, he served as senior adviser at the board of governors of the

Federal Reserve System The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...

in the US, where he started his professional career as an economist in 1999. While at the Federal Reserve he taught undergraduate and graduate courses in

macroeconomics Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole. For example, using interest rates, taxes, and ...

and monetary economics at

Georgetown University Georgetown University is a private university, private research university in the Georgetown (Washington, D.C.), Georgetown neighborhood of Washington, D.C. Founded by Bishop John Carroll (archbishop of Baltimore), John Carroll in 1789 as Georg ...

and

Johns Hopkins University Johns Hopkins University (Johns Hopkins, Hopkins, or JHU) is a private university, private research university in Baltimore, Maryland. Founded in 1876, Johns Hopkins is the oldest research university in the United States and in the western hem ...

. He holds undergraduate degrees in mathematics and economics as well as PhD in economics from the

Massachusetts Institute of Technology The Massachusetts Institute of Technology (MIT) is a private land-grant research university in Cambridge, Massachusetts. Established in 1861, MIT has played a key role in the development of modern technology and science, and is one of the ...

. On 29 April 2012 President Demetris Christofias announced that Panicos O. Demetriades would succeed Orphanides as governor of the Central Bank of Cyprus effective 3 May 2012. Orphanides is a professor at

MIT Sloan School of Management The MIT Sloan School of Management (MIT Sloan or Sloan) is the business school of the Massachusetts Institute of Technology, a private university in Cambridge, Massachusetts. MIT Sloan offers bachelor's, master's, and doctoral degree programs, ...

. After his mandate as governor of the ECB, Orphanides has repeatedly criticized the ECB's reliance on private credit ratings agencies for accepting assets as eligible for the ECB's monetary refinancing operations. In a September 2020 study co-authored with Yvan Lengwiler for the European Parliament's

Committee on Economic and Monetary Affairs The Committee on Economic and Monetary Affairs (ECON) is a committee of the European Parliament which is responsible for the regulation of financial services, the free movement of capital and payments, taxation and competition policies, oversight ...

, Orphanides provided suggestions for the ECB's monetary policy strategy review.

Research

A major theme of Orphanides' research on monetary economics has been the evaluation and design of monetary policy in real time. He argued that since the data available to policy makers at the time policy decisions are made are imperfect and subject to substantial revisions, the historical analysis of monetary policy decisions as well as the evaluation of alternative policy strategies must be based on the information available in real time (Orphanides, 2001, Orphanides, 2003). His work has documented significant problems arising from policy decisions drawing on unobservable concepts such as the

output gap The GDP gap or the output gap is the difference between actual GDP or actual output and potential GDP, in an attempt to identify the current economic position over the business cycle. The measure of output gap is largely used in macroeconomic po ...

. Orphanides has argued against output-gap-based policy rules, such as the

Taylor rule The Taylor rule is a monetary policy targeting rule. The rule was proposed in 1992 by American economist John B. Taylor for central banks to use to stabilize economic activity by appropriately setting short-term interest rates. The rule consider ...

, and in favour of non-activist policy rules drawing on

Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the ...

and

Knut Wicksell Johan Gustaf Knut Wicksell (December 20, 1851 – May 3, 1926) was a leading Swedish economist of the Stockholm school. His economic contributions would influence both the Keynesian and Austrian schools of economic thought. He was married to th ...

. He has stressed that overemphasizing the output gap as reflected, for example, in the

or optimal control policy, is counterproductive for stabilizing the macroeconomy. He has also provided an explanation of the high inflation experience in the United States during the late 1960s and 1970s as resulting from policy focused too closely at stabilizing the real economy, by aiming to close the perceived output and unemployment gaps. According to this analysis, the high inflation resulted from the fact these gaps were badly mismeasured due to overoptimistic real time estimates of potential output and the natural rate of unemployment (Orphanides, 2003). In related work, Orphanides and Simon van Norden, have explained that the unreliability of output gap measures in real time is of a more general nature than previously thought. They documented the unreliability of various statistical techniques for measuring the

in real-time and also the lack of predictive power of real-time

estimates for forecasting inflation, thus calling into question policy approaches that rely on the output for stabilization policy (Orphanides and Norden, 2002). The role of imperfect knowledge and the formation of expectations in a learning environment has been a theme in the work by Orphanides and John C. Williams. They have argued that the central bank must ensure that inflation expectations must remain well-anchored, in line with the central bank's price stability objective, in order to improve the stability of the macroeconomy. Their work documented the benefits associated with a central bank's numerical price stability objective and the pitfalls of optimal control policy design (Orphanides and Williams, 2008). Working with Volker Wieland and others, Orphanides also contributed to research on the conduct of monetary policy near to zero lower bound for nominal interest rates. This work was motivated by the Japanese experience with near-zero rates in the late 1990s but became of immediate policy relevance during the 2008 global financial crisis (Orphanides and Wieland, 2000).Orphanides, Athanasios and Volker Wieland (2000)
"Efficient monetary policy design near price stability"
, Journal of the Japanese and International Economies, 14, 2000, pp. 327–365

Footnotes

External links

Orphanides' homepage
{{DEFAULTSORT:Orphanides, Athanasios Monetary economists Macroeconomists Cypriot academics Cypriot economists 1962 births Living people Governors of the Central Bank of Cyprus Massachusetts Institute of Technology School of Science alumni Georgetown University faculty Johns Hopkins University faculty Czech emigrants to Cyprus Czech people of Cypriot descent Czech people of Greek descent MIT School of Humanities, Arts, and Social Sciences alumni Central bankers