Franco Modigliani

Franco Modigliani (June 18, 1918 – September 25, 2003) was an Italian economist naturalized American, a professor at the MIT Sloan School of Management and MIT Department of Economics who won the Nobel Memorial Prize in Economics in 1985.
== Tossup Questions ==
# This economist developed a theory suggesting that bond investors have a preference for a maturity length that can only be overturned if there is a risk premium, called "preferred habitat theory." Along with Duesenberry he names a consumption function that postulates that current consumption is determined not just by current income, but also by its previous highest peak. He designed a large scale model of the US economy for the Federal Reserve, the MPS. He also partially names a theorem that demonstrated that under certain assumptions, the value of a firm is not affected by whether it is financed by equity or debt. With Robert Brumberg, he postulated that young and old households have a higher propensity to consume while middle aged households have a higher propensity to save, the "Life Cycle Hypothesis of Saving." For 10 points, name this 1985 Nobel winner, who formulated a capital structure theorem with Merton Miller.
# Along with Emile Grunberg, this economist asserted that predictions lead people to act in a way that causes predicted outcomes to resemble actual outcomes in "The Predictability of Social Events," one of the earliest works of rational expectations. This economist developed the MPS model of the American economy for the Federal Reserve. He devised a measure that adjusts the risk of a stock to match a performance benchmark along with his granddaughter Leah, a measure known as M-squared. Along with Richard Brumberg, this economist theorized that people decide how much they want to spend at each age, and predicted that people save during their youth to spend money during retirement. The developer of the life cycle hypothesis, for 10 points, identify this economist, the namesake of a theorem about conditions in which a firm's financial decisions do not affect its value along with Merton Miller.