Franco Modigliani

Franco Modigliani

Born: 1918. Died: 2003.


A student of Jacob Marschak's at the New School for Social Research, Franco Modigliani, in the model presented in his Ph.D. thesis (1944), was to provide the nucleus of the Neo-Keynesian Synthesis of post-war macroeconomics.

His further work went on to consolidate much of that research effort - whether in his life-cycle hypothesis for the consumption function (1953) or in the building of large macroeconometric models - such as his famous MPS model.

He also made several important contributions to theory of money and finance - notably, the fundamental Modigliani-Miller theory (1958) of corporate finance and the "Preferred Habitat" theory for the term structure of interest rates.

Modigliani was teaching at M.I.T. when he won the Nobel prize in 1985.

He died on September 25, 2003 in Cambridge, Massachusetts.

Major books of Franco Modigliani

- A Solution to the Social Security Reform, with M.L. Ceprini and A.S. Muralidhar, 2000
- Adventures of an Economist, 2001
- Capital Markets: Institutions and Instruments, with Frank J. Fabozzi, 1996
- The Debate over Stabilization Policies
- The European economic recovery: a need for new policies?, 1987
- Foundations of Financial Markets and Institutions, with Frank J. Fabozzi, Frank Jones and Michael G. Ferri, 2001
- Growth, investments, Public Deficit and Maastricht, 1996, Nobels for the Future
- The Italian Economy: What Next?, with Mario Baldassarri, 1995
- Letter to Financial Times, with G. LaMalfa, 1998
- The Monetarist Controversy: A Seminar Discussion with Milton Friedman, 2005
-Monetary Policy and Consumption, in Consumer Spending and Monetary Policy, 1971
- Monetary Theory and Stabilization Policies editors Andrew Abel, Simon Johnson, 1989
- Mortgage and Mortgage-Backed Securities Markets with Frank J. Fabozzi, 1992
- New Mortgage Designs for Stable Housing in an Inflationary Environment, 1975
- Rethinking Pension Reform with Arun Muralidhar, 2005
- The Role of Anticipations and Plans in Economic Behavior and Their Use in Economic Analysis and Forecasting, 1961
- The Supply of Money and the Control of Nominal Income with L. Papademos, 1990, in Friedman and Hahn, editors, Handbook of Monetary Economics - intro
- Technological Innovation and Labour Policies, 1998, Nobels for the Future
- Utility Analysis and the Consumption Function: An interpretation of cross section data, with R. Brumberg, 1954, in Kurihara, editor, Post Keynesian Economics

Major articles of Franco Modigliani

- 1941, Review of Vinci's Analisi Economiche, AER
- 1941, Review of Vinci's I Concetti Statistici dell' Analisi Economica, AER
- 1944, Liquidity Preference and the Theory of Interest and Money, Econometrica
- 1954, The Predictability of Social Events with Emile Grunberg, JPE
- 1955, A Linear Decision Rule for Production and Employment Scheduling with Charles C. Holt and Herbert A. Simon, ManSci
- 1957, Private Investment in the Electric Power Industry and the Acceleration Principle, with Avram Kisselgoff, REStat
- 1957, Protection of Minority Interest and the Development of Security Markets, with Enrico Perotti, Financial Times
- 1958, Forecasting Uses of Anticipatory Data on Investment and Sales with H. M. Weingartner, QJE
- 1958, The Cost of Capital, Corporation Finance and the Theory of Investment, with M.H. Miller, AER
- 1958, New Developments on the Oligopoly Front, AER
- 1961, Long-Run Implications of Alternative Fiscal Policies and the Burden of the National Debt, EJ
- 1963, The "Life Cycle" Hypothesis of Saving: Aggregate Implications and Tests, with A. Ando, AER
- 1963, Corporate Income Taxes and the Cost of Capital: A correction, with M.H. Miller, AER
- 1963, The Monetary Mechanism and its Interaction with Real Phenomena, REStat
- 1964, Some Empirical Tests of Monetary Management and of Rules versus Discretion Some Empirical Tests of Monetary Management and of Rules versus Discretion, JPE
- 1965, Reflexive Prediction with Emile Grunberg, PhoS
- 1965, The Relative Stability of Monetary Velocity and the Investment Multiplier with Albert Ando, AER
- 1966, Debt Management and the Term Structure of Interest Rates: An Empirical Analysis of Recent Experience with Richard Sutch, JPE
- 1966, Dividend Policy, Growth, and the Valuation of Shares with Merton H. Miller, JB
- 1966, Épargne et consommation en avenir aléatoire with Jacques H. Dreze, Cahiers du Séminaire d'Économétrie
- 1966, Innovations in Interest Rate Policy, with Richard Sutch, AER
- 1966, The Pasinetti Paradox in Neoclassical and More General Models, with Paul Samuelson, RES
- 1966, Statistical vs. Structural Explanations of Understatement and Regressivity in "Rational" Expectations, with John Bossons, Econometrica
- 1968, The Transmission of Demand Fluctuations Through a Distribution and Production System, the Tv-Set Industry with Charles C. Holt and John P. Shelton, CJE
- 1969, Econometric Analysis of Stabilization Policies with Albert Ando, AER
- 1972, An Alternative Model of Business Investment Spending with M. Ishaq Nadiri and R. J. Gordon, Brookings Papers on Economic Activity
- 1973, A Generalization of the Phillips Curve for a Developing Country, with Ezio Tarantelli, RES
- 1973, Inflation, Rational Expectations and the Term Structure of Interest Rates, with Robert J. Shiller, Economica
- 1975, Alternative Investment Performance Fee Arrangements and Implications for SEC Regulatory Policy with Gerald A. Pogue, RJE
- 1975, The Consumption Function in a Developing Economy and the Italian Experience with E. Tarantelli, AER
- 1975, The Stock Market and the Economy with Barry Bosworth and Saul Hymans, Brookings Papers on Economic Activity
- 1975, Targets for Monetary Policy in the Coming Year with Lucas Papademos, Brookings Papers on Economic Activity
- 1977, Investment, Interest Rates, and the Effects of Stabilization Policies, with Robert E. Hall, Christopher A. Sims and William Brainard, Brookings Papers on Economic Activity
- 1977, Is a Tax Rebate an Effective Tool for Stabilization Policy?, with Charles Steindel, Saul H. Hymans, F. Thomas Juster, Brookings Papers on Economic Activity
- 1977, The Monetarist Controversy or should we forsake stabilization policies?, AER
- 1979, Has the Economist Lost Control of the Economy?, Bulletin of the American Academy of Arts and Sciences
- 1979, Inflation, Rational Valuation and the Market, with Richard A. Cohn, Financial Analysts Journal
- 1979, Toward an Understanding of the Real Effects and Costs of Inflation, with S.Fischer, WWA
- 1980, The Central Role of Credit Crunches in Recent Financial History, with Albert M. Wojnilower and Benjamin M. Friedman, Brookings Papers on Economic Activity
- 1982, Comment on R. J. Barro, "U.S. Deficits Since World War I", JoF
- 1982, Debt, Dividend Policy, Taxes, Inflation and Market Valuation, JoF
- 1982, The Output Cost of Disinflation in Traditional and Vector Autoregressive Models, with Robert J. Gordon and Stephen R. King, RES
- 1986, A Theory and Test of Credit Rationing A Theory and Test of Credit Rationing with Dwight M. Jaffee, AER
- 1986, Aggregate Unemployment in Italy, 1960-1983 with F. Padoa Schioppa and N. Rossi, Economica
- 1986, Life Cycle, Individual Thrift and the Wealth of Nations, Science
- 1987, The Growth of the Federal Deficit and the Role of Public Attitudes, with Andre Modigliani, POQ
- 1988, The Role of Intergeneration Transfers and Life-Cycle Saving in the Accumulation of Wealth, JEP
- 1997, A Euro minus the D-Mark. with M. Baldassarri, Financial Times
- 1997, Business Expectations and Strategy for the United States of Europe with H. Askari, Stategy and Business
- 1998, Il debito italiano? Non fa paura, with G. LaMalfa, Corriere della sera
- 1998, La banca che vogliamo, with G. LaMalfa, Corriere della sera
- 1998, Perils of unemployment, with G. LaMalfa, Financial Times
- 1998, Yes to the Euro, but Also to an Investment Plan for Jobs, with G. LaMalfa, Herald Tribune
- 2004, The Chinese Saving Puzzle and the Life-Cycle Hypothesis with Shi Larry Cao, JEL


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