I
was born in Rome, Italy, the son of Enrico Modigliani подстанция Трансформаторная КТП Franco - Autobiography Modigliani - Autobiography Modigliani полностью деревянный Franco подиум акустический and Olga Flaschel. My
father was a leading pediatrician in the city and my mother was a volunteer
social worker.
My school performance in the early years was good though not outstanding. Then,
in 1932, a major trauma occurred. My father died as a consequence of an operation.
I suddenly realized how deeply I
loved and admired him and at 13 my whole world
seemed to collapse. After this event my school performance for the next 3 years
became spotty until I moved to Liceo Visconti, the best high school in Rome,
and the challenge proved healthy and I seemed to blossom. Encouraged, I decided
to skip the last year of the Liceo, passed the required difficult exams and
entered the University of Rome at 17 (two years ahead of the norm).
My family hoped that I would follow in my father's steps, entering a career
in medicine. I was torn for a while, but finally decided against it because
of my low tolerance level for sufferings and blood. Instead I chose law which
in Italy, opens the way to many career possibilities. In my second year I decided
to enter a national competition sponsored by the student organization (I Littoriali
della Coltura) in the area of economics. To my surprise I won first prize and,
although now I would hesitate to recommend that first essay as a significant
contribution to economics, clearly, it served the purpose of establishing my
current interest in economics. Unfortunately, under fascism, teaching in this
field was dismal, and only with the advice of the few good economists I knew
personally, and especially of Riccardo Bachi, I began on my own to read the
English and Italian classics.
The Littoriali had put me in contact with young antifascists, and my political
opposition to the regime began then. My involvement with my future wife, Serena
Calabi, and her remarkable father, Giulio, who was a long standing antifascist
also contributed. In 1938 the Italian racial laws were promulgated and at the
invitation of my future in laws, I joined them in Paris where, in May 1939,
Serena and I were married. I enrolled at the Sorbonne but found the teaching
there uninspiring and a waste of time, so I spent my time studying on my own
and writing my thesis at the Bibliotheque St. Genevieve. In June 1939 I returned
briefly to Rome to discuss my thesis and receive my degree of Doctor Juris from
the University of Rome. Shortly after this, fearing that Europe was going to
be soon engulfed in a bloody war, we applied for an immigration visa for the
U.S. and arrived in New York in August 1939, a few days before the beginning
of World War II.
It became apparent that our stay in the U.S. would be a long one and I immediately
began thinking on how best to pursue my interest in economics. I had the great
luck of being awarded a free tuition fellowship by the Graduate Faculty of Political
and Social Science of the New School for Social Research, an institution freshly
created to give haven to the European
scholars who were victims of the three
fascist dictatorships. Thus in fall 1939, I started on a routine that was to
last three years, of studying at night from 6 - 10, while working during the
day selling European books to support my family which soon included our first
son: Andre. I worked hard but, nonetheless, remember that period as an exciting
one, as I was discovering my passion for economics, thanks also to excellent
teachers, including Adolph Lowe and above all Jacob Marschak to whom I owe a
debt of gratitude beyond words. He helped me develop solid foundations in economics
and econometrics, some mathematical foundations, introduced me to the great
issues of the day and gave me, together with his unforgettable kindness, constant
encouragement. In particular I owe to him that blend of theory and empirical
analysis, theories that can be tested and empirical work guided by theory -
that has characterized a good deal of my later work. Marschak also provided
me with an experience that contributed to my development, by inviting me to
participate in an informal seminar which met in New York around 1940-41, whose
members included, among others, Abraham Wald, Tjalling Koopmans and Oscar Lange.
I consider that my formal training ended in 1941 when Marschak left the New
School to join the University of Chicago, and I obtained my first teaching job
as an instructor at New Jersey College for Women. My first published article
in English, "Liquidity Preference and the Theory of Interest and Money", Econometrica,
Vol. 12, No. 1, January 1944, which is also, substantially, my doctoral dissertation,
and which I regard as one of my major contributions, appeared some two years
later. The result of discussions in Marschak's seminar and of a running debate
with Abba Lerner, it purports to integrate the Keynesian "revolution", then
generally regarded as a total break with the past, with the mainstream of classical
economics.
In 1942 I became an instructor in economics and statistics at Bard College,
then a residential college of Columbia University, and came to appreciate the
unique qualities of life in an American college campus, especially the intimate
association with first rate students. In 1944 I returned to the New School as
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together with Hans Neisser, I was responsible for a project whose results were
eventually published in National Income and International Trade. During
this period I also made my first
contribution to the study of saving, which
has since come to be known as the Duesenberry-Modigliani hypothesis.
In fall 1948 I left New York, having been awarded the prestigious Political
Economy Fellowship of the University of Chicago as well as offered the opportunity
of joining, as a Research Consultant, the Cowles Commission for Research in
Economics, then the leading institution in its field. Shortly after my arrival
I accepted an attractive position at the University of Illinois as director
of a research project on "Expectations and Business Fluctuations". However,
I remained in Chicago through the academic year 1949-50, greatly benefiting
from my association with the Cowles Commission, staffed and visited by people
like Marschak, Koopmans, Arrow, Simon, at a time when the profession was absorbing
two important revolutions, one centering on the theory of choice under uncertainty,
initiated by von Neuman and Morgenstern, and the other on statistical inference
from non-experimental observations, inspired by Haavelmo.
My association with the University of Illinois lasted only till 1952 because
of internal strife. During that brief time, I befriended a brilliant young graduate
student, Richard Brumberg. With his collaboration we laid the foundations for
what was to become the "Life Cycle Hypothesis of Saving". It was elaborated
in 1953 and 1954 in two papers, one dealing with individual behaviour and the
other with aggregate saving. After we had both left the University of Illinois,
Brumberg had gone to complete his Ph.D. at the John Hopkins University and I
joined Carnegie Institute of Technology, now Carnegie-Mellon University. The
"aggregate" paper was only published in 1980 in my Collected Papers because
the shock of Brumberg's untimely death in 1955 sapped my will to undertake the
revisions and condensation that would have been required for publication in
one of the standard professional journals.
My association with Carnegie, which lasted until 1960, was a very productive
one. In addition to completing the two basic papers setting the foundations
for the "Life Cycle Hypothesis", I collaborated on a book dealing with the problem
of optimal production smoothing, and wrote the two essays with Miller on the
effect of financial structure and dividend policy on the market value of a firm.
I also published a paper with E. Grunberg on the predictability of social events
when the agent reacts to prediction, which later was to provide one of the pillars
for the "theory of rational expectations". All of these contributions represented,
to some extent, the coming to fruition of seeds started during my research on
"Expectations and Business Fluctuations".
In 1960 I was a visiting professor at the Massachusetts Institute of Technology,
to which I returned after a year at Northwestern University, and where I have
remained ever since. Supported by this unique
institution and its unique colleagues,
I have pursued the interests developed earlier in macroeconomics, including
criticism of the monetarist positions, generalizations of the monetary mechanism
and empirical tests of the" Life Cycle Hypothesis". I have also branched out
into new areas and, in particular, international finance and the international
payment system, the effects of and cures for inflation, stabilization policies
in extensively indexed open economies, and into various fields of finance such
as credit rationing, the term structure of interest rates and the valuation
of speculative assets.
In the late sixties I also had a major responsibility for designing a large
scale model of the U.S. economy, the MPS, sponsored by the Federal Reserve Bank
and still utilized by it. Finally, I have participated actively in the debate
over economic policies both in Italy and the U.S., concentrating lately on the
deleterious effects of the huge public deficits.
From Les Prix Nobel. The Nobel Prizes 1985, Editor Wilhelm Odelberg, [Nobel Foundation], Stockholm, 1986
This autobiography/biography was written at the time of the award and later published in the book series Les Prix Nobel/Nobel Lectures. The information is sometimes updated with an addendum submitted by the Laureate. To cite this document, always state the source as shown above.
 
Franco Modigliani died on September 25, 2003.