The late Merton Miller was an economist and the winner of the 1990 Nobel Prize in economics “for pioneering work in the theory of financial economics,” and for “fundamental contributions to the theory of corporate finance,” according to his Nobel citation by the Royal Swedish Academy of Science. Before his death at the age of 77 in 2000, he inspired students and colleagues at the Graduate School of Business at the University of Chicago, where he spent 39 years.
Long after “retiring” as Robert R. McCormick Distinguished Service Professor of Finance in 1993, he remained a fixture on campus, participating in finance workshops; teaching and mentoring doctoral, MBA and law students.
Miller was the author of eight books, including Merton Miller on Derivatives (1997), Financial Innovations and Market Volatility (1991) and Macroeconomics: A Neoclassical Introduction (1974, with Charles Upton).
He traveled and lectured until the end of his life. According to the Chicago Graduate School of Business, he finished writing his last paper long hand the day before he died.
Miller was born in Boston and graduated from Boston Latin School. He received an AB from Harvard University in 1943, completing his studies in three years. In 1949, he entered Johns Hopkins University and received a PhD in economics in 1952.
Miller also received honorary degrees from nearly a dozen institutions in the United States and abroad.
During World War II, Miller worked as an economist in the Division of Tax Research of the U.S. Treasury Department and then in the Division of Research and Statistics of the Board of Governors of the Federal Reserve System.
In their 1958 paper, “The Cost of Capital, Corporation Finance and the Theory of Investment,” Miller and Modigliani showed a firm’s value is determined by its investment decisions and not by its financing decisions.
A companion paper, “Dividend Policy, Growth, and the Valuation of Shares,” written by Miller and Modigliani in 1961, extended the basic results by showing that, given investment decisions, dividend policy is also irrelevant.
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