Franco Modigliani Biography, Life, Interesting Facts


Franco Modigliani

Birthday :

June 18, 1918

Died On :

September 25, 2003

Birth Place :

Rome, Italy

Zodiac Sign :


Franco Modigliani was born on June 18, 1918, in Rome, Italy. His parents were Olga Flaschel and Enrico Modigliani. Sadly, Enrico died when Franco was still a teenager, leaving him to be raised only by his mother.


With the tragic death of Modigliani’s father hitting him during a vulnerable time in his life--his early teenage years-- many aspects of Modigliani's life suffered. Franco Modigliani had poor grades in school for several years because he was suffering from a deep depression. His mother did everything that she could to encourage him to improve his educational standing, including sending him to one of the best schools in Italy: the Liceo Visconti. Here, Modigliani was encouraged to improve his grades. He began to excel in school, and he even graduated earlier than he was supposed to.

For his post-secondary studies, Franco Modigliani attended the University of Rome. He initially set out to study law, but his interests later switched to economics. The professors at his university were dull on this subject, so he sought an informal education through economies that he knew personally.

Later, he left the University of Rome and began to study at the Sorbonne. During this time, he was also active in the anti-fascist movement in Italy. He later left the Sorbonne and self-taught himself.

In 1939, Franco Modigliani wrote his thesis paper and presented it in Rome. Although he was self-taught for some of his education, his paper still earned him a Ph.D. He then left Europe and moved to the United States to avoid fascists.

Once in the United States, Franco Modigliani earned a scholarship to become a fellow at the New School for Social Research. Here, she studies for several years, until he finished his studies in 1944. However, he began his professional career in 1942, while he continued to take his classes. When he did graduate, he earned a Doctorate of Social Sciences.



In 1942, Franco Modigliani began working as an instructor at Columbia University. Here, he taught economics. He only worked here until 1944.

In 1948, Franco Modigliani began working for the University of Illinois. While working at this university, he became the director of the Expectations and Business Fluctuations research project. This project helped him to get in touch with other economists from other universities in the United States.

During the 1950’s, Franco Modigliani began to work with one of the economists he had recently met--Merton Miller. Together, these two economists came up with the Modigliani-Miller Theorem. This theorem states, “the market value of a company is calculated using its earning power and the risk of its underlying assets and is independent of the way it finances investments or distributes dividends.” This theory helped to improve business finances in general. The theorem is currently taught in many businesses classes in universities, as it is still an important theory in business economics.

In 1957, Franco Modigliani came up with another useful economics theory: the life cycle hypothesis. This hypothesis states that at the beginning of a person’s life, they do not spend much money and contribute to the economy because they do not have much to contribute. In the middle of a person’s life, they spend a lot and contribute a lot because they are healthy enough to work and have money to spend. It lastly states that near the end of a person’s life, they will not spend much money again, mostly because they are retired or otherwise cannot work, and will likely not have much money to spend. Like any hypothesis, this does not fit everyone, especially for those who come from wealthy families.

Late in his career, Franco Modigliani began working at the Massachusetts Institute of Technology (MIT). He worked there until his death in 2003.



Throughout Franco Modigliani’s career, he has written over a dozen papers on economics. Some of his most famous papers (mostly essays) are listed below.

The Debate Over Stabilization Policy
The Role of Intergenerational Transfers and Life-Cycle Saving in the Accumulation of Wealth
New Developments on the Oligopoly Front
Liquidity Preference and the Theory of Interest and Money


Awards And Accomplishments

All of Modigliani’s awards are for his outstanding work on the topic of economics. Some of his most prestigious awards are listed below.

James R. Killian Faculty Achievement Award from MIT (1985)
Nobel Memorial Prize in Economics (1985)
Franco Modigliani earned an honorary degree from the University of Naples Federico II.


Family Life

Franco Modigliani  married Serena Calabi in 1939.



Franco Modigliani died on September 25, 2003, in Cambridge, Massachusetts, USA. He was 85 years old when he passed away.

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