Constantine Christos "Costas" Azariadis ( el, Κώστας Αζαριάδης; born February 17, 1943) is a

macroeconomist 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, a ...

born in

Athens Athens ( ; el, Αθήνα, Athína ; grc, Ἀθῆναι, Athênai (pl.) ) is both the capital and largest city of Greece. With a population close to four million, it is also the seventh largest city in the European Union. Athens dominates a ...

Greece Greece,, or , romanized: ', officially the Hellenic Republic, is a country in Southeast Europe. It is situated on the southern tip of the Balkans, and is located at the crossroads of Europe, Asia, and Africa. Greece shares land borders wi ...

. He has worked on numerous topics, such as labor markets,

business cycles Business cycles are intervals of expansion followed by recession in economic activity. These changes have implications for the welfare of the broad population as well as for private institutions. Typically business cycles are measured by examini ...

, and

economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate o ...

and

development Development or developing may refer to: Arts *Development hell, when a project is stuck in development *Filmmaking, development phase, including finance and budgeting *Development (music), the process thematic material is reshaped * Photograph ...

. Azariadis originated and developed implicit contract theory.

Education

Azariadis studied engineering in the National Technical University of Athens before earning his

MBA A Master of Business Administration (MBA; also Master's in Business Administration) is a postgraduate degree focused on business administration. The core courses in an MBA program cover various areas of business administration such as accounti ...

and

PhD PHD or PhD may refer to: * Doctor of Philosophy (PhD), an academic qualification Entertainment * '' PhD: Phantasy Degree'', a Korean comic series * '' Piled Higher and Deeper'', a web comic * Ph.D. (band), a 1980s British group ** Ph.D. (Ph.D. al ...

in economics at

Carnegie Mellon Carnegie may refer to: People *Carnegie (surname), including a list of people with the name *Clan Carnegie, a lowland Scottish clan Institutions Named for Andrew Carnegie * Carnegie Building (Troy, New York), on the campus of Rensselaer Polyte ...

during 1969-73. His doctoral dissertation at Carnegie Mellon was advised by Edward C. Prescott and Robert Lucas. His dissertation won him the

Alexander Henderson Award The Tepper School of Business is the business school of Carnegie Mellon University. It is located in the university's campus in Pittsburgh, Pennsylvania, US. The school offers degrees from the undergraduate through doctoral levels, in addition t ...

for excellence in economics, an award also won by

Nobel Laureates The Nobel Prizes ( sv, Nobelpriset, no, Nobelprisen) are awarded annually by the Royal Swedish Academy of Sciences, the Swedish Academy, the Karolinska Institutet, and the Norwegian Nobel Committee to individuals and organizations who make ou ...

Oliver Williamson Oliver Eaton Williamson (September 27, 1932 – May 21, 2020) was an American economist, a professor at the University of California, Berkeley, and recipient of the 2009 Nobel Memorial Prize in Economic Sciences, which he shared with Elinor Ost ...

, Dale Mortensen, Finn Kydland and

Edward Prescott Edward Christian Prescott (December 26, 1940 – November 6, 2022) was an American economist. He received the Nobel Memorial Prize in Economics in 2004, sharing the award with Finn E. Kydland, "for their contributions to dynamic macroeconomics: ...

Academic trajectory

He was an assistant professor at

Brown Brown is a color. It can be considered a composite color, but it is mainly a darker shade of orange. In the CMYK color model used in printing or painting, brown is usually made by combining the colors orange and black. In the RGB color model ...

during 1973-76, a visiting researcher at

Hebrew University The Hebrew University of Jerusalem (HUJI; he, הַאוּנִיבֶרְסִיטָה הַעִבְרִית בִּירוּשָׁלַיִם) is a public university, public research university based in Jerusalem, Israel. Co-founded by Albert Einstein ...

in 1977, then at

University of Pennsylvania The University of Pennsylvania (also known as Penn or UPenn) is a Private university, private research university in Philadelphia. It is the fourth-oldest institution of higher education in the United States and is ranked among the highest- ...

during 1977-92. He was appointed professor at

UCLA The University of California, Los Angeles (UCLA) is a public land-grant research university in Los Angeles, California. UCLA's academic roots were established in 1881 as a teachers college then known as the southern branch of the California ...

in 1992. On July 1, 2006, he was made Edward Mallinckrodt Distinguished Professor in Arts & Sciences at the Economics Department of Washington University in St. Louis while retaining a position at UCLA as a

professor emeritus ''Emeritus'' (; female: ''emerita'') is an adjective used to designate a retired chair, professor, pastor, bishop, pope, director, president, prime minister, rabbi, emperor, or other person who has been "permitted to retain as an honorary title ...

. The same year, he became a research fellow at the

Federal Reserve Bank of St. Louis The Federal Reserve Bank of St. Louis is one of 12 regional Reserve Banks that, along with the Board of Governors in Washington, D.C., make up the United States' central bank. Missouri is the only state to have two main Federal Reserve Banks (Ka ...

. Azariadis was elected a Fellow of the

Econometric Society The Econometric Society is an international society of academic economists interested in applying statistical tools to their field. It is an independent organization with no connections to societies of professional mathematicians or statisticians. ...

in 1989.

Contributions to economics

Implicit contract theory

Azariadis originated implicit contract theory. He proved that wage rigidities may represent a mechanism by which firms insure workers against risk, thus showing that wage rigidity was not necessarily evidence in favor of the

Keynesian theory Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output an ...

. Later Azariadis demonstrated that there are ways in which uncertainty is structured that imply that wages cannot perform their risk insurance role and simultaneously produce full employment. This result aided the Keynesian theory by providing a coherent microeconomic explanation of

unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refe ...

Poverty trap

Azariadis formalized and developed the idea of

poverty trap In economics, a cycle of poverty or poverty trap is caused by self-reinforcing mechanisms that cause poverty, once it exists, to persist unless there is outside intervention. It can persist across generations, and when applied to developing count ...

. He showed that there would be multiple equilibria arising from threshold externalities in the overlapping generations model, and some of the equilibria are associated with long-lasting poverty. This novel idea envisioned the possibility of

convergence clubs Convergence clubs, in global economic theory, pertain to levels of international attainment. Groups of countries are classified based on educational levels, income per capita and other measurable factors. For example, countries considered "poor" ...

Self-fulfilling prophecies

Azariadis contributed to clarifying the concept of

sunspot equilibrium In economics, the term sunspots (or sometimes "a sunspot") refers to an ''extrinsic'' random variable, that is, a random variable that does not affect economic fundamentals (such as endowments, preferences, or technology). ''Sunspots'' can also r ...

developed by

David Cass David Cass (January 19, 1937 – April 15, 2008) was a professor of economics at the University of Pennsylvania, mostly known for his contributions to general equilibrium theory. His most famous work was on the Ramsey–Cass–Koopmans model of ...

and

Karl Shell Karl Shell (born May 10, 1938) is an American theoretical economist, specializing in macroeconomics and monetary economics. Shell received an A.B. in mathematics from Princeton University in 1960. He earned his Ph.D. in economics in 1965 at St ...

. He generalized it in the name of "Self-fulfilling prophecies" which consist of a belief system consistent with the rational expectations equilibrium. By doing that, he could demonstrate fluctuations can emerge endogenously in a neoclassical model of equilibrium in which prices are flexible and expectations are rational.

Major publications

* Azariadis, C. 1975. Implicit contracts and underemployment equilibria. Journal of Political Economy, 83: 1183-1202 * Azariadis, C. 1976. On the Incidence of Unemployment, Review of Economic Studies (February): 115-125. * Azariadis, C. 1981. A Re-examination of Natural Rate Theory, American Economic Review (December): 946-960. * Azariadis, C. 1981. Self-Fulfilling Prophecies, Journal of Economic Theory, (December): 380-396. * Azariadis, C. 1983. Employment With Asymmetric Information, Quarterly Journal of Economics (Supplement): 157-172. * Azariadis, C. and R. Guesnerie, 1986. Sunspots and Cycles, Review of Economic Studies (October): 725-738. * Azariadis, C. and A. Drazen, 1990. Threshold Externalities in Economic Development, Quarterly Journal of Economics (May 1990): 501-526. * Azariadis, C. 1996. The Economics of Poverty Traps, Part One: Complete Markets, Journal of Economic Growth, (December): 449-486. * Azariadis, C. and B. Smith. 1998. Financial Intermediation and Regime Switching in Business Cycles, American Economic Review, (June): 516-536. * Azariadis, C. and L. Lambertini. 2003. Endogenous Debt Constraints in Lifecycle Economies, Review of Economic Studies: 461-488. * Azariadis, C., J. Bullard, and L. Ohanian. 2004. Trend-Reverting Fluctuations in the Life-Cycle Model, Journal of Economic Theory: 334-356. Author of: * Intertemporal Macroeconomics. Oxford: Blackwell Publishers, February 1993.

Sources

External links

Prof. Azariadis' homepageAzariadis' webpage at the Federal Reserve
{{DEFAULTSORT:Azariadis, Costas 1943 births Living people Writers from Athens 20th-century Greek economists Fellows of the Econometric Society Washington University in St. Louis faculty National Technical University of Athens alumni Greek academics Greek emigrants to the United Kingdom Tepper School of Business alumni 21st-century Greek economists Greek expatriates in the United States Brown University faculty