Modigliani, Franco

(born June 18, 1918, Rome, Italy—died Sept. 25, 2003, Cambridge, Mass., U.S.) Italian-born U.S. economist. He fled fascist Italy for the U.S. in 1939 and earned a doctorate from the New School for Social Research in 1944. He taught at several universities, including the Massachusetts Institute of Technology (1962–88; thereafter professor emeritus). His work on personal savings prompted him to formulate the life-cycle theory, which asserts that individuals build up savings during their younger working lives for use during their own old age and not as an inheritance for their descendants. In order to analyze financial markets, he invented a technique for calculating the value of a company's expected future earnings that became a basic tool in corporate decision making and finance. He received the Nobel Prize in 1985.

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