Merton H. Miller, whose full name is Merton Howard Miller is one of the eminent figures in the field of economics. His contributions towards the discipline have not only enriched it but also has fetched him name and fame around the world. Miller had received the Nobel Prize in 1990 for his contribution towards economics. He had created a path breaking theory in finance economics.
Life and Career
Merton H. Miller was born in Massachusetts, US on 16th May 1923. He worked and continued with his studies simultaneously. He completed his graduation from Harvard University while he was working at the Treasury Department in US. He graduated from the university in the year 1944. After completing his graduation he went ahead to pursue his masters and PhD degree from John Hopkins University in Baltimore, Maryland in the year 1952.
He stared off with his professional career with the Carnegie Institute of Technology in Pittsburgh, Pennsylvania and taught there till 1961. After his short stint in the university he switched off to the University of Chicago’s Graduate School of Business Administration as professor of economics.
Contributions to Economics
Miller had worked and elaborated on the portfolio theory of Markowitz which dealt with investment on assets with minimum risk involved and maximum return. He had also worked on Sharpe’s theory to explain that security prices reflect potential returns and risks. He was one of the creators of the Modigliani-MillerTheorem. The theorem explores the complex relationship between the various factors, which are taken into account while a corporate decision is taken. The relation between a company’s dividend policy and capital asset structure and cost of capital and market value is explored by the theorem. The theorem also explains that the profitability of a company is more important than the method in which the company funds those activities.
Miller is recognized through out the world as one of the most significant developers of empirical and theoretical analysis in the arena of corporate finance.
Miller had an illustrious career that started off with the university of Chicago and finally culminated in the Business School where he was the Robert R. McCormick Distinguished Service Professor. Miller had also been the Director of the Chicago Mercantile Exchange from 1990-2000.
Major Works of Miller
Miller had written many books, which had been very influential in the study of economics. Some of them are:
Built-In Flexibility
The Cost of capital, Corporation Finance and the Theory of Investment
The Corporation Income Tax and Corporate Finance Policies
Dividends and Taxes
Value at Risk: Uses and Abuses
The Death of Miller on 3rd June 2000 in Chicago was like a blow to the world of economics. He will always be remembered through his works, which have added to the treasure house of economics.