Merton Miller and Modern Finance

26 Pages Posted: 7 Dec 2000

See all articles by René M. Stulz

René M. Stulz

Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)


In this keynote address to the 2000 Financial Management Association Meetings, I consider Merton Miller's contributions to the field of finance. I argue that his most important contribution is to have made arbitrage arguments the cornerstone of modern finance. The arbitrage proof of Proposition I introduced a new standard in finance, namely that any result the finance profession takes seriously must have the critical property that it cannot be undermined by clever arbitrageurs. I show how arbitrage is a constant theme in Merton Miller's career from his work in corporate finance to his analyses of financial innovation, financial crashes, and crises.

Suggested Citation

Stulz, Rene M., Merton Miller and Modern Finance. Available at SSRN:

Rene M. Stulz (Contact Author)

Ohio State University (OSU) - Department of Finance ( email )

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National Bureau of Economic Research (NBER)

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European Corporate Governance Institute (ECGI)

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