Merton Miller

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Merton H. Miller

Merton H. 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.[1]

Miller was a public director at the Chicago Board of Trade (CBOT) and the Chicago Mercantile Exchange (CME).

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.[2]

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).[3]

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.

In 2015, Miller was posthumously inducted into the Futures Industry Association's Futures Hall of Fame, which was established in 2005 to commemorate outstanding contributions to the global futures and options community. [4]


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 Ph.D. in economics in 1952.

Miller also received honorary degrees from nearly a dozen institutions in the United States and abroad.


His first academic appointment after graduation was at the London School of Economics and Political Science as an assistant lecturer in American economic history in 1952 to 1953.[5]

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.

Miller and fellow Nobel laureate Franco Modigliani, developed the much cited “M&M Theorems” on capital structure and dividend policy that are the foundations of the theory of corporate finance.

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.

Professional Awards[edit]

Professional Activities[edit]

  • Member, American Economic Association, American Finance Association, International Association of Financial Engineers
  • Vice President, American Finance Association, 1975
  • President, American Finance Association, 1976
  • Associate Editor, Journal of Financial Economics, 1973-­1983
  • Coeditor, Journal of Business, 1977­-1989
  • Member, Advisory Board, Midland Corporate Finance Journal (now the Journal of Applied Corporate Finance), 1981-
  • Public Director, Chicago Board of Trade, 1983-­1985
  • Member, Board of Editors, Japan and the World Economy: International Journal of Economic Theory and Policy, 1987-
  • Member, Board of Editorial Advisers, Journal of Accounting, Auditing, and Finance, 1988-
  • Member, Advisory Board, Center for Pacific Basin Capital Markets Research at the University of Rhode Island, 1989-
  • Public Director, Board of Directors of the Chicago Mercantile Exchange, 1990-­2000
  • Member, New York Stock Exchange Advisory Panel on Market Volatility and Investor Confidence, 1990
  • Foreign Member, Royal Swedish Academy of Engineering Sciences, IVA, 1992
  • Member, Board of Overseers, Koc University, Istanbul, Turkey (first private Turkish university), 1994-
  • Member, Advisory Board, Center for Japanese-U.S. Business and Economic Studies, New York University, 1994­-1998
  • Executive Director, CME-CBOT Committee on Joint Strategic Initiatives, 1996-­1998.[6]



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