Constantine Christos "Costas" Azariadis, is a macroeconomist who was born February 17, 1943 in Athens, Greece. He has worked on diverse topics, such as labor markets, business cycles, and economic growth and development. Azariadis originated and developed the concept of implicit contract theory.
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Azariadis studied engineering in the National Technical University of Athens before earning his MBA and PhD in economics at Carnegie Mellon 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 for excellence in economics, an award also won by Nobel Laureates Oliver Williamson, Dale Mortensen, Finn Kydland and Edward Prescott.
He was an assistant professor at Brown during 1973-76, a visiting researcher at Hebrew University in 1977, then at University of Pennsylvania during 1977-92, and finally professor at UCLA since 1992. Since July 1, 2006, he is the Edward Mallinckrodt Distinguished Professor in Arts & Sciences at the Economics Department at Washington University while retaining a position at UCLA as a professor emeritus. He is a research fellow at the Federal Reserve Bank of St. Louis since 2006. Azariadis was elected a Fellow of the Econometric Society in 1989.
Azariadis originated the concept of 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. 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.
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Steven N. Durlauf 2007. An Interview with Costas Azariadis, Macroeconomic Dynamics, 11:2:249-271.