Merton Miller

Merton Miller developed the Modigliani-Miller theorem with Franco Modigliani in the late 1950s, showing that under perfect market conditions, a firm's value is independent of its financing structure. This irrelevance proposition became the foundation of modern corporate finance, and more practically, showed practitioners what assumptions matter when capital structure does affect value. Miller received the Nobel Prize in Economics in 1990 along with Sharpe and Markowitz. He later contributed to the early development of options and derivatives pricing theory at the University of Chicago. Miller was also a forceful advocate for financial innovation and market deregulation, arguing that restrictions on financial products prevented markets from efficiently allocating risk. His testimony before Congress on behalf of financial futures markets in the 1970s and 1980s helped preserve the regulatory framework that allowed derivatives markets to develop in Chicago, contributing to the US becoming the global center of derivatives trading.