Franco Modigliani

Infobox Scientist
name = Franco Modigliani


image_size = 180px
birth_date = birth date|1918|6|18|mf=y
birth_place = Rome, Italy
death_date = death date and age|2003|9|25|1918|6|18|mf=y
death_place = Cambridge, Massachusetts, USA
nationality = Italy
field = Finance
alma_mater = New School for Social Research University of Rome La Sapienza
work_institution = MIT Carnegie Mellon
University of Illinois at Urbana-Champaign
doctoral_advisor = Jacob Marschak
doctoral_students = Robert Shiller Hossein Askari
known_for = Modigliani-Miller theorem Life-cycle hypothesis MPS model
prizes = Nobel Prize in Economics (1985)

Franco Modigliani (Rome, June 18, 1918 – September 25, 2003) was an Italian-American economist at the MIT Sloan School of Management and MIT Department of Economics, and winner of the Nobel Memorial Prize in Economics in 1985.

Born in Italy, he left Italy in 1939 because of his Jewish background and antifascist views. He first went to Paris with the family of his then-girlfriend, Serena, whom he married in 1939, and then to the United States. From 1942 to 1944, he taught at Columbia University and Bard College as an instructor in economics and statistics. In 1944, he obtained his D. Soc. Sci. from the New School for Social Research working under Jacob Marschak. In 1946, he became a naturalized citizen of the United States, and in 1948, he joined the University of Illinois at Urbana-Champaign faculty.

When he was a professor at the Graduate School of Industrial Administration of Carnegie Mellon University in the 1950s and early 1960s, Modigliani made two path-breaking contributions to economic science:

*Along with Merton Miller, he formulated the important Modigliani-Miller theorem in corporate finance. This demonstrated that under certain assumptions, the value of a firm is not affected by whether it is financed by equity (selling shares) or debt (borrowing money).

*He was also the originator of the life-cycle hypothesis, which attempts to explain the level of saving in the economy. Modigliani proposed that consumers would aim for a stable level of consumption throughout their lifetime, for example by saving during their working years and spending during their retirement.

In 1962, he joined the faculty at MIT, achieving distinction as an Institute Professor, where he stayed until his death.

Modigliani also co-authored the textbooks, "Foundations of Financial Markets and Institutions" and "Capital Markets: Institutions and Instruments" with Frank J. Fabozzi of Yale School of Management.

Active until the end, Modigliani enlisted fellow Nobel laureates Paul Samuelson and Robert Solow in 2003 to write a letter published in "The New York Times" chiding the Anti-Defamation League for honoring Italy's prime minister, Silvio Berlusconi. Berlusconi had recently defended Mussolini's conduct toward Jews during World War II.

Modigliani was a trustee of the Economists for Peace and Security.

For many years, he lived in Belmont, Massachusetts, where his wife was active Belmont Garden Club. He died in Cambridge, Massachusetts.

Bibliography

*cite book |author=Modigliani, Franco |title=Adventures of an Economist |publisher=Texere |location=London, New York |year=2001 |id=ISBN 1-587-99007-5
*cite book |last=Fabozzi |first=Frank J. |coauthors=Franco Modigliani, Michael G. Ferri |title=Foundations of Financial Markets and Institutions |publisher=Prentice Hall |location=Upper Saddle River, NJ |year=1998 |id=ISBN 0-136-86056-7
*cite book |last=Fabozzi |first=Frank J. |coauthors=Franco Modigliani |title=Capital Markets: Institutions and Instruments |publisher=Prentice Hall |location=Upper Saddle River, NJ |year=1996 |id=ISBN 0-133-00187-3
*cite book |last=Modigliani |first=Franco |coauthors=Andrew B Abel, Simon Johnson |title=The Collected Papers of Franco Modigliani |publisher=MIT Press |location=Cambridge, Mass. |year=1980 |id=ISBN 0-262-13150-1

External links

* [http://www.nobel.se/economics/laureates/1985/modigliani-autobio.html Franco Modigliani autobiography]
* [http://www.nobel-winners.com/Economics/franco_modigliani.html About Franco Modigliani from nobel-winners.com]
* [http://mitsloan.mit.edu/fm-memorial/ Memorial for Franco Modigliani - MIT Sloan]
* [http://kilop.atspace.com/modigliani-press.html his pioneering analyses of saving and of financial markets.]
* [http://www.geocities.com/econ_555jim/modigliani-autobio.html School performance in the early years was good though not outstanding]
* [http://ideas.repec.org/e/pmo37.html IDEAS/RePEc]

Persondata
NAME= Modigliani, Franco
ALTERNATIVE NAMES=
SHORT DESCRIPTION= Economist
DATE OF BIRTH= June 10, 1918
PLACE OF BIRTH= Rome
DATE OF DEATH= September 25, 2003
PLACE OF DEATH= Cambridge, Massachusetts