Merton Miller facts for kids
Quick facts for kids
Merton Miller
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| Born | May 16, 1923 |
| Died | June 3, 2000 (aged 77) |
| Nationality | United States |
| Institution | Carnegie Mellon University University of Chicago London School of Economics |
| Field | Economics |
| School or tradition |
Chicago School of Economics |
| Alma mater | Harvard University Johns Hopkins University |
| Doctoral advisor |
Fritz Machlup |
| Doctoral students |
Eugene Fama William Poole |
| Contributions | Modigliani–Miller theorem |
| Awards | Nobel Memorial Prize in Economic Sciences (1990) |
| Information at IDEAS / RePEc | |
Merton Howard Miller (born May 16, 1923 – died June 3, 2000) was an American economist. He is famous for helping create the Modigliani–Miller theorem in 1958. This important idea suggested that how a company gets its money (from debt or stock) doesn't really change its value.
In 1990, he won the Nobel Memorial Prize in Economic Sciences. He shared this award with Harry Markowitz and William F. Sharpe. Miller spent most of his working life teaching at the University of Chicago's Booth School of Business.
About Merton Miller
Early Life and Education
Merton Miller was born in Boston, Massachusetts. His parents were Sylvia and Joel Miller. His father was a lawyer.
He went to Harvard University for his first degree. During World War II, he worked as an economist. He helped with tax research for the government. Later, he earned his Ph.D. in economics in 1952. This degree was from Johns Hopkins University. After that, he taught for a short time at the London School of Economics.
His Career and Big Ideas
In 1958, Miller was working at Carnegie Mellon University (then called Carnegie Institute of Technology). There, he worked with his friend Franco Modigliani. They wrote a very important paper together. It was called The Cost of Capital, Corporate Finance and the Theory of Investment.
This paper changed how people thought about how companies get money. Before, many believed a company could lower its costs by finding the perfect mix of debt and stock. But Miller and Modigliani said this wasn't true.
Their Modigliani–Miller theorem stated that there is no "perfect mix." Instead, companies should focus on paying less tax and making the company's value as high as possible. The amount of debt versus stock would then just happen naturally.
They used a clever idea called "no arbitrage" to prove this. This means that if there's a way to make money without any risk, it will quickly disappear. This idea became a common way to argue in economics.
Miller wrote or helped write eight books. He became a special member of the Econometric Society in 1975. He was also the president of the American Finance Association in 1976. He taught at the University of Chicago's Booth School of Business from 1961 until he retired in 1993. Even after retiring, he kept teaching for several more years.
His work with Modigliani created what is now known as the "Modigliani-Miller Financial Theory." This theory is still very important in how businesses make financial decisions today.
He also served on the boards of important financial markets. These included the Chicago Board of Trade and the Chicago Mercantile Exchange. He passed away in Chicago on June 3, 2000.
Family Life
Merton Miller was married to Eleanor Miller, who died in 1969. He later married Katherine Miller, who survived him. He had three daughters from his first marriage: Pamela (born 1952), Margot (born 1955), and Louise (born 1958). He also had two grandsons.
See also
In Spanish: Merton Miller para niños
