He was born in Slatina, Olt County to Nicolae Caracostea, a magistrate of Aromanian descent, and his wife Eufrosina (née Bichan), a French teacher.
That year, he enrolled in the literature and philosophy faculty of the University of Bucharest, which he attended intermittently:[1] in 1902, he was working as a clerk at the court of auditors, abandoning his studies for a time.
[6] That autumn, the new regime appointed him head of Revista Fundațiilor Regale; as such, he suspended contributions from critics whom he deemed sympathetic toward Jewish literature.
[1][8] His ascendancy under Romania's wartime regimes was not due to politics: he had participated neither in the main parties nor in pro-fascist groups, but remained loyal to the ideas of Nicolae Iorga.
Caracostea's activity at the magazine was curtailed by the fact that he had to issue a monthly report both to the Anglophile Royal House and to the pro-German Antonescu.
Its situation was precarious: circulation had dropped to 800, issues appeared at delayed intervals and mobilization made contributors difficult to find.