Along with Richard Sutch, he developed a theory to explain the term structure of interest rates which is known as the "preferred habitat" hypothesis. His first work on the theory of saving led to a hypothesis named for him and Duesenberry, while his later collaboration with a grad student named Richard Brumberg at the University of Illinois led to his development of the "l
Along with Richard Sutch, he developed a theory to explain the term structure of interest rates which is known as the "preferred habitat" hypothesis. His first work on the theory of saving led to a hypothesis named for him and Duesenberry, while his later collaboration with a grad student named Richard Brumberg at the University of Illinois led to his development of the "life cycle" hypothesis of saving. In the 1960s he began work on a model of the American economy which is known as the "MPS" model, though he may be best known for a 1958 theorem which suggests that a firm's value is independent of the way in which it is financed. FTP, name this economist who won the Nobel Prize in 1985, largely for that theorem he developed with Merton Miller.
Along with Richard Sutch, he developed a theory to explain the term structure of interest rates which is known as the "preferred habitat" hypothesis.