Selected Works of Merton H. Miller ─ Celecbration of Markets : Economics

Widely regarded as one of the founders of modern corporate finance, Merton H. Miller was awarded a Nobel Prize in 1990 for his work in the theory of finance and financial economics. Selected Works of Merton H. Miller gathers together in two volumes a selection of Miller's most influential contributions over more than fifty years of active research. A common theme running throughout both volumes is Miller's conviction about the utility of market-based approaches to topics as diverse as dividend policy, bank regulation, the structure of securities markets, and competition between research universities and teaching colleges.

Miller was perhaps best known for a series of highly influential papers he cowrote in the 1950s and 1960s with fellow Nobel laureate Franco Modigliani that advanced a set of capital structure theorems later dubbed the "M and M propositions." In brief, the M and M propositions state that the actions of investors, firms, and capital markets will cause the market value of a firm to be independent of its capital structure. In other words, a corporation's value depends on its investments in people, ideas, and physical capital goods and not on the mix of bonds, stocks, and other securities used to finance the investments. Four of these papers are reprinted here, together with important later work by Miller in macroeconomics, corporate capital structure, management science, asset pricing, and the economic and regulatory problems of the financial services industry.

Diverse and innovative, the papers in Selected Works of Merton H. Miller will interest students and practitioners of economics, finance, and business, as well as policymakers responsible for market regulation.

Merton H. Miller (1923-2000) was the Robert H. McCormick Distinguished Service Professor Emeritus in the Graduate School of Business at the University of Chicago and the president of the American Finance Association. In 1990 he was awarded the Nobel Memorial Prize in Economic Sciences. He was the author or editor of a number of books, most recently Merton Miller on Derivatives and Financial Innovations and Market Volatility. Bruce D. Grundy, a former student of Miller, is the Ian Potter Professor of Finance at Melbourne Business School. His research interests include corporate governance, derivatives pricing, real options, and the mutual fund industry. Prior to joining Melbourne Business School Bruce was a member of the faculty at the Wharton School and Stanford's GSB and a visiting faculty member at the National University of Singapore and the Johann Wolfgang Goethe-Universitat Frankfurt am Main.