Franco Modigliani was born in 1918 in Rome, Italy. He started studying economics by chance after winning the first prize in a national competition for university students, where he was asked to write an essay about the effects of price control. The Anti-Semitic atmosphere in Italy prior to World War II caused Modigliani to decide to emigrate to USA. In 1944 he received his PhD for Economics. He joined the staff of the University of Illinois, later he moved to the Carnegie Institute of Technology and finally to M.I.T, where he became a professor of economics and finance.

Franco Modigliani was awarded the 1985 Nobel prize “for his pioneering analysis of saving and financial markets”.

Modigliani contributed to established tools for evaluating the value of a company, capital price, the effect of taxes and others. These models marked a milestone in the modern theory of finance.

He developed mathematical formulations of the the Keynesian model. As a neo-Keynesian economist, Franco Modigliani believes in the real effect of money on the economy and that, under certain conditions, an increase of government budget can have a positive effect against economic depression.