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COVER STORY
Merton Miller: A Giant of Modern Finance

The University of Chicago, the Graduate School of Business, and corporate finance lost an miller at deskirreplaceable asset when Merton H. Miller died June 3 at age 77. Perhaps longtime colleague Eugene F. Fama best expressed the loss in an e-mail to faculty on the morning of Miller’s death: “The university and the school have lost one of their defining beacons.”

A staunch believer in the power of free markets, Miller was Chicago economics personified. Born in Boston and educated at Harvard and Johns Hopkins University, Miller found an intellectual home at Chicago when he joined the faculty in 1961. The rigor with which he developed, tested, and defended his ideas exemplified the standard for which Chicago is known.

“These four adjectives define Mert to me: smart, creative, articulate, and passionate,” said Dean Robert S. Hamada. “Being smart and creative earned him the Nobel. Being articulate and passionate distinguished him from anyone else and was the reason why he was the symbol for modern finance, Chicago free-markets economics, the GSB, the University of Chicago, and the city of Chicago.”

In 39 years at the GSB, Miller influenced and inspired countless students and colleagues. Long after “retiring” as Robert R. McCormick Distinguished Service Professor of Finance in 1993, he remained a fixture on campus, participating in finance workshops; teaching and mentoring doctoral, M.B.A., and law students; and debating theories around a lunch table at the Quadrangle Club.

Miller won the Nobel Prize in 1990 for ideas that profoundly changed corporate finance. “Miller and coauthor Franco Modigliani were among the very first to apply the theories of economics to studying what companies should be doing,” Dean Hamada told the Chicago Tribune.

Miller’s ideas continued to have real-world impact throughout his career. He served as director of the Chicago Board of Trade from 1983 to 1985 and the Chicago Mercantile Exchange from 1990 until his death, and his views on market regulation have been quoted extensively. He investigated the Orange County bankruptcy and Metallgesellschaft, widely viewed as derivatives disasters, and continued to champion the use of financial derivatives.

Until the very end of his life, he traveled and lectured, and his opinions had enormous reach and power. In 1998, for example, he met with Zhu Rongji, then China’s vice premier, to discuss economic issues. He finished writing his last paper longhand the day before he died, according to Hamada.

Miller will be remembered as a lover of the Chicago Bears, well-brewed beer, and the well-told joke. He will be deeply missed around the world and especially on campus, where many have lost a lifelong mentor, colleague, and friend. Miller is survived by his wife, Katherine; three daughters, Margot Horn, Pamela Chwedyk, and Louise Lorber; and two grandsons. His first wife, Eleanor, died in 1969.

A memorial service was held October 14. At the family’s request, contributions in Miller’s memory can be made to the University of Chicago Chamber Music Series. For information, contact Marna Feltzer in the music department at 773.702.8068.--T.L.S.

Related Stories:

A Lifetime of Achievement
An overview of Merton Miller’s professional achievements.

Merton Miller Remembered
Miller’s colleagues, admirers, former students, and friends recall the man and his legacy.

A Tribute to Merton Miller
Eugene Fama, Robert R. McCormick Distinguished Service Professor of Finance, pays tribute to Merton Miller.

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