Franco Modigliani

Franco Modigliani was an influential Italian-American economist known for his work on savings, consumption, and economic theory. He is best known for the Modigliani-Miller theorem, which suggests that a company’s value is unaffected by its capital structure, meaning how it finances itself (debt vs. equity) does not change its overall value. Modigliani also developed the life-cycle hypothesis, which explains how people plan their savings and consumption over their lifetime, anticipating changes in income. His ideas have significantly shaped modern economics, earning him the Nobel Prize in Economic Sciences in 1985.