Word: modigliani
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Dates: during 1980-1989
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...holds that people tend to save when they are young to create a nest egg for their old age. Basic though it may be, that notion ranks among the most powerful and widely used concepts in modern economics. It was also the work for which M.I.T.'s Franco Modigliani, 67, the theory's principal author, was named the 1985 Nobel laureate in economic science. "With many people, the Nobel Prize is a question of if," said Paul Samuelson, an M.I.T. colleague and the 1970 economics laureate. "With Franco, it was only a question of when." The Italian-born Modigliani...
...Modigliani's insights have influenced generations of students and policymakers. His "life-cycle" savings theory, developed in the 1950s with Richard Brumberg, is accepted by nearly all experts as a key to understanding thrift. Among other uses, the work offers a yardstick for gauging the impact of different pension systems. The theory suggests, for example, that people will tuck away less when they are guaranteed retirement income. That prediction has been borne out by the experience of Sweden, where savings rates plummeted from 7% to virtually zero after the government embarked in the 1960s on a sweeping pension program...
...thought the main reason people saved had to do with consumption wishes. They saved whenever they had more money than usual and they didn't save when they had less," Modigliani said...
...Nobel Prize in economics, created in 1969 by Sweden's central bank, is awarded by the Royal Swedish Academy of Sciences and carries a $225,000 prize. Modigliani is the 13th American to receive this prize in 17 years...
...Modigliani has lived in the United States since 1939, when he fled fascist Italy. Before coming to MIT, he taught at Carnegie-Mellon, Northwestern and several other schools...