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Franco Modigliani
Neo-Keynesian economics
Franco Modigliani.jpg
Birth June 18, 1918(1918-06-18)
Death September 25, 2003 (aged 85)
Nationality Italian American
Field Financial economics
Influenced Jacques Drèze
Robert Shiller
Contributions Modigliani-Miller theorem
Life-cycle hypothesis
MPS model

Franco Modigliani (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 Rome, Italy, he left Italy in 1939 because of his Jewish origin 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:

  • 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. In 1985 he received MIT's James R. Killian Faculty Achievement Award.[1]

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.

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

For many years, he lived in Belmont, Massachusetts; he died in Cambridge, Massachusetts.


  • Modigliani, Franco (2001). Adventures of an Economist. London, New York: Texere. ISBN 1-587-99007-5.  
  • Fabozzi, Frank J.; Franco Modigliani, Michael G. Ferri (1998). Foundations of Financial Markets and Institutions. Upper Saddle River, NJ: Prentice Hall. ISBN 0-136-86056-7.  
  • Fabozzi, Frank J.; Franco Modigliani (1996). Capital Markets: Institutions and Instruments. Upper Saddle River, NJ: Prentice Hall. ISBN 0-133-00187-3.  
  • Modigliani, Franco; Andrew B Abel, Simon Johnson (1980). The Collected Papers of Franco Modigliani. Cambridge, Mass.: MIT Press. ISBN 0-262-13150-1.  


  1. ^ Fabozzi, Frank J.; Frank J. Jones, Franco Modigliani (2010). Foundations of Financial Markets and Institutions (Fourth Edition). Pearson Education, Inc.. pp. Dedication. ISBN 0-13-613531-5.  

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