Franco Modigliani

Franco Modigliani (June 18, 1918 – September 25, 2003) was an Italian-American economist at the MIT Sloan School of Management, and winner of The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel in 1985.

Related Topics:
June 18 - 1918 - September 25 - 2003 - Italian-American - Economist - MIT Sloan School of Management - The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel - 1985

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Born in Italy, he left Italy for the US in 1939 because of his Jewish background and antifascist views. In 1946, he became a naturalized citizen of the United States.

Related Topics:
Italy - 1939 - 1946 - Naturalized citizen - United States

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Modigliani, along with Merton Miller, formulated the important Modigliani-Miller theorem in corporate finance.

Related Topics:
Merton Miller - Modigliani-Miller theorem - Corporate finance

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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).

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He was also the originator of the life-cycle hypothesis, which attempts to explain the level of saving in the economy.

Related Topics:
Life-cycle hypothesis - Saving

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Modigliani proposed that consumers would aim for a stable level of income throughout their lifetime, for example by saving during their working years and spending during their retirement.

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