Franco Modigliani – economist

Writer and professor developed theories about spending and saving

Franco Modigliani studied in Rome
before emigrating to America

Nobel prize winner Franco Modigliani, who was an originator of the economic life-cycle hypothesis that attempts to explain the level of spending in the economy, was born on this day in 1918 in Rome.

He wrote several books outlining his economic theories, became a professor at three American universities, and received the Nobel Memorial Prize in Economics in 1985. 

Modigliani also formulated the Modigliani-Miller theorem for corporate finances, which is based on the idea that the value of a private firm is not affected by whether it is financed by equity or by debt.

Born and brought up in a Jewish family, Modigliani enrolled in the Faculty of Law at the Sapienza University of Rome at the age of 17. In his second year at Sapienza, his entry in a national economics contest won first prize and he was presented with it by the Fascist dictator, Benito Mussolini.

Modigliani went on to write essays for the Fascist magazine Lo Stato, displaying an inclination for the fascist ideals that were critical of liberalism at the time.

He argued the case for socialism in an article for the magazine about the organisation and management of production in a socialist economy.

But after racial laws were passed in Italy in 1938, he left Rome, with his girlfriend, Serena Calabi, whose father was a prominent opponent of Mussolini, to join her parents in Paris.

The neoclassical main building of the Massachusetts
Institute of Technology - Modigliani's base for many years

He returned to Rome to discuss his thesis and obtain his diploma in 1939, but afterwards went back to Paris.

Later that year, Modigliani emigrated with his girlfriend’s family to the United States, where he enrolled  at the New School for Social Research in New York. The PhD dissertation he submitted there was judged to be ‘ground breaking’.

Modigliani taught at Columbia University and Bard College in New York between 1942 and 1944 and became a naturalised citizen of the US in 1946. He later taught at the University of Illinois and Carnegie Mellon University before becoming an Institute Professor at the Massachusetts Institute of Technology (MIT).

He developed the hypothesis that consumers aim for a stable level of consumption during their lifetime by saving during their working years and spending during their retirement. Economists believe this was an original theory when he introduced it in a paper written in 1954. 

Modigliani also introduced the concept of the NIRU, the non-inflationary rate of unemployment, which referred to the level of unemployment, below which inflation rises, which he believed should influence policy decisions.

Modigliani in 2000: he continued
to teach well into his 80s

Modigliani married Serena Calabi in 1939 in Paris and they had two children, Andre and Sergio. 

With Leah Modigliani, his granddaughter, who followed him in becoming an economist, he developed the Modigliani Risk-Adjusted Performance, a measure of the risk-adjusted returns of an investment portfolio.

His Nobel prize was awarded to him for his pioneering analyses of saving and financial markets and in the same year he received MIT’s James R Killian Faculty Achievement award. 

In 1997, he received an honoris causa degree in Management Engineering from the University of Naples Federico II.

Modigliani became a trustee of the Economists for Peace and Security organisation and was an influential adviser to the Federal Reserve, designing a tool to guide monetary policy in Washington.

A collection of Modigliani’s economic papers is now housed in the Duke University’s Rubenstein Library in Durham, North Carolina.

Modigliani died in 2003 at the age of 85 in Cambridge, Massachusetts, where he taught until the last six months of his life.  Two years before his death he had written about his life as an economist in his autobiography, Adventures of an Economist.

Marcello Piacentini's modern campus at the
Sapienza University of Rome

Travel tip:

The university Franco Modigliani attended in Rome is often known simply as La Sapienza, which means ‘the wisdom.’  It can trace its origins back to 1303, when it was opened by Pope Boniface VIII as the first pontifical university. In the 19th century the University broadened its outlook and a new campus, designed by Urban theorist and architect, Marcello Piacentini, was built near the Termini railway station in 1935. Rome University now caters for more than 112,000 students.

The Via della Conciliazione, also designed by
Marcello Piacentini, frames St Peter's Basilica

Travel tip:

Architect Marcello Piacentini studied arts and engineering in Rome and afterwards worked for the Fascist Government. He developed a simplified neoclassicism which became the mainstay of Fascist architecture and as well as designing the new campus for  La Sapienza, he was responsible for the redesign of the road approaching St Peter’s in Rome, Via della Conciliazione. Roughly 500m long, Via della Conciliazione connects St Peter's Square to the Castel Sant'Angelo on the western bank of the Tevere (Tiber) river. A great many buildings, many of them residential, had to be requisitioned and demolished to create space for the road, which was constructed between 1936 and 1950 as the primary access route to St Peter's Square.

Also on this day:

1466: The birth of music printer Ottaviano dei Petrucci

1511: The birth of sculptor and architect Bartolomeo Ammannati

1943: The birth of actress, singer and TV presenter Raffaella Carrà

1946: The birth of football manager Fabio Capello

1952: The birth of actress Isabella Rossellini

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Paolo Gentiloni – Prime Minister of Italy

Current premier is both noble and a Democrat

Paolo Gentiloni has been prime minister
of Italy since December 2016

Italy’s Prime Minister, Paolo Gentiloni, was born on this day in 1954 in Rome.

A member of the Democratic Party, Gentiloni was asked to form a Government in December 2016 by Italian President Sergio Mattarella.

A professional journalist before he entered politics, Gentiloni is a descendant of Count Gentiloni Silveri and holds the titles of Nobile of Filottranno, Nobile of Cingoli and Nobile of Macerata.

The word Nobile, derived from the Latin nobilis, meaning honourable, indicates a level of Italian nobility ranking somewhere between the English title of knight and baron.

Gentiloni is related to the politician Vincenzo Ottorino Gentiloni, who was a leader of the Conservative Catholic Electoral Union and a key ally of Prime Minister Giovanni Giolitti, who held the office five times between 1892 and 1921.

Gentiloni attended the Classical Lyceum Torquato Tasso in Rome and went on to study at La Sapienza University in the city where he became a member of the Student Movement, a left wing youth organisation. He moved on to become a member of the Workers’ Movement for Socialism and graduated in Political Sciences.

He came director of La Nuova Ecologia, the official newspaper of Legambiente, which led to him first meeting Francesco Rutelli, who at the time was leader of the Federation of the Greens.

Gentiloni was a member of the Olive
Tree coalition led by Romano Prodi

He became Rutelli’s spokesman in his campaign to become Mayor of Rome. After being elected as mayor, Rutelli appointed Gentiloni as Jubilee and Tourism Councillor on Rome’s city council .

Gentiloni was elected as a member of parliament in 2001 and helped found the Daisy party in 2002, serving as the party’s communications spokesman.

He was elected again in 2006 as a member of the Olive Tree, the coalition led by Romano Prodi.

Gentiloni helped found the Democrat party in 2007 and was elected again in the 2008 election, which was won by Silvio Berlusconi.

Gentiloni came third when he ran for Mayor of Rome in 2013 but was elected to the Chamber of Deputies again in the same year.

He supported Matteo Renzi in the Democratic party leadership election and was appointed Minister of Foreign Affairs when Renzi became prime minister in 2014.

Gentiloni stated on television that Italy would be ready to fight in Libya against the Islamic State because there was an active terrorist threat to the country only a few hours away by boat. He was subsequently threatened by ISIL.

After a car bomb exploded outside the Italian consulate in Cairo, he said that Italy would continue to fight against terrorism.

Gentiloni and US president Donald Trump

Gentiloni also negotiated the release of two Italians held hostage by Syrian terrorists in 2015.

In December 2016, after Renzi announced his resignation, Gentiloni was asked by President Mattarella to form a new Government.

Since taking office, he has signed agreements with Libya and Tunisia to try to prevent immigrants entering Italy illegally.

He hosted the 43rd G7 summit in Taormina in Sicily, attended by British premier Theresa May and US president Donald Trump.

In January 2017, during an official trip to Paris, he suffered an obstructed coronary artery and received an emergency angioplasty. The following day he tweeted that he felt well and would be back at work soon.

Yesterday, on the eve of his 63rd birthday, he held talks with trade unions and told them his Government had prepared a significant, sustainable package on pensions and retirements.

The Palazzo Chigi, the Italian PM's official residence

Travel tip:

When in Rome, Paolo Gentiloni lives in Palazzo Chigi, the official residence of the Prime Minister of Italy, which is a 16th century palace in Piazza Colonna,  just off Via del Corso and close to the Pantheon.

The port city of Ancona is the capital of Le Marche

Travel tip:

Gentiloni holds the title of Nobile of Macerata, which is a city in the Marche region. He also holds the titles of Nobile of Filotranno and Nobile of Cingoli, two nearby towns. Le Marche is an eastern region, located between the Apennine mountains and the Adriatic. The capital, Ancona, is a port city surrounded by medieval villages. Nearby is Pesaro, the birthplace of the composer Gioachino Rossini.

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Giulio Andreotti - political survivor

Christian Democrat spent 45 years in government

Giulio Andreotti, pictured in 1979

Giulio Andreotti, who was Italy's most powerful politician for a period lasting almost half a century, was born on this day in 1919 in Rome.  He was a member of almost every Italian government from 1947 until 1992, leading seven of them.

He would have certainly gone on to be president were it not for the scandals in which he became embroiled in the 1990s, when his Christian Democrat party collapsed as a result of the mani pulite - clean hands - bribery investigations.  Andreotti himself was accused of an historic association with the Mafia and of commissioning the murder of a journalist, although he was acquitted of the latter charge on appeal.

The youngest of three children, Andreotti was brought up in difficult circumstances by his mother after his father, who had taught at a junior school in Segni, about 60km (37 miles) south-east of the capital in Lazio, had died when he was only two years old.

In contrast with the unassuming, mild-mannered persona for which he became known as an adult, the young Andreotti had a fiery temper.  On one occasion, in church, he attacked another altar boy, stubbing out a lit taper in his eye after feeling he had been ridiculed.

He attended the prestigious Liceo Torquato Tasso in Via Sicilia, not far from the Borghese Gardens and the Via Vittorio Veneto, before going on to graduate with honours after studying law at the University of Rome, while at the same time working in a tax office.

An opponent of Fascism, Andreotti's instinct was to keep his head down during Mussolini's reign but he did join the Italian Catholic Federation of University Students (FUCI), which was the only non-fascist youth organisation allowed to exist at the time.  Membership of the group enabled him to meet Aldo Moro, the future Christian Democrat prime minister, whom he succeeded as FUCI president in 1942.

Alcide de Gasperi, the founder of the
Christian Democrats and Andreotti's sponsor

Italy voted to become a republic in 1946 and Andreotti's political career began at the same time.  With the support of the first prime minister of the republic, Alcide de Gasperi, he was elected to the Constituent Assembly, the provisional parliament which had the task of writing the new Italian constitution.

De Gasperi had been a fierce opponent of Mussolini and was imprisoned in 1927 before being released on the grounds of poor health and being given refuge by the Catholic Church. He met Andreotti at the Vatican Library, where he worked as a cataloguer between 1929 and 1943.  The latter showed enthusiasm for the Christian Democrat party De Gasperi had been secretly establishing and when the party was formally launched it was not long before Andreotti was appointed as De Gasperi's assistant.

Andreotti began his government career in 1947, when he became Secretary of the Council of Ministers in De Gasperi's cabinet at the age of just 28. The following year he was elected to the newly formed Chamber of Deputies, representing the constituency of Rome-Latina-Viterbo-Frosinone, which would remain his stronghold until the 1990s.

During Andreotti's long period of influence, there were many groups with a vested interest in making sure that the country was run by a Catholic party, and it was Andreotti's ability to form unlikely alliances across the country's fragmented political spectrum that held the line for so many years.

Those groups included, naturally enough, the church itself - still a massive part of the fabric of Italian society.  The United States, meanwhile, was determined to keep Italy out of the hands of the Italian Communist Party, which also suited the drivers of Italy's post-War industrial and financial recovery. The Mafia, too, feared that their ability to strike clandestine deals would be compromised by a shift to the left.  Andreotti, a quiet, self-effacing man who carried an aura of calm, emerged as the perfect figure to stand untouched at the centre of the whirlwind of Italian political life, skilfully maintaining the status quo.

In that Italy did not become communist and grew at one point to be the fifth largest economy in the world, he succeeded.  But his time at the forefront was not without difficult moments, most notably the kidnap and murder of his friend, Aldo Moro, by the Red Brigades in 1978.

Andreotti, left, with Aldo Moro in 1978, shortly before the
latter was kidnapped by the Red Brigades terrorist group

Andreotti refused to negotiate with the terrorist group, despite personal pleas from Moro, while the police and Italian secret services attracted criticism for failing to locate the apartment in which the former prime minister was being held, even though it was under their noses in central Rome.

Theories began to circulate that Andreotti was somehow complicit in the kidnap because Moro had been one of the politicians pushing for the so-called 'historic compromise', in which the Communists would be invited to play a direct role in government for the first time, in return for keeping the Christian Democrats in power.

Nothing was ever proved, although what is fact is that, after Moro had been killed, Andreotti took the opportunity to propose a government of 'National Solidarity' in the face of the possibility of more acts of terrorism, strengthening his grip on power. The Communists supported the move but when they asked to participate directly in a new coalition, they found the 'historic compromise' was no longer on the agenda.

The theories resurfaced in the 1990s when Andreotti admitted the existence at the time of the kidnap of Operation Gladio, an undercover network sponsored by NATO and the US secret services to bolster Italy as the last line of defence against the advance of Soviet communism.

Similar theories lay behind the accusation that Andreotti had colluded with the Sicilian Mafia to arrange the murder of a journalist, Carmine Pecorelli, in Rome in 1979, to prevent the publication of a book by Pecorelli which contained information related to the Moro kidnap that would probably have ended Andreotti's career.

In 2002, Andreotti was sentenced, along with Mafia boss Gaetano Badalamenti, to 24 years in jail for Pecorelli's murder. The sentence was thrown out by the Italian Supreme Court in 2003.

A long-running investigation into Andreotti's suspected links with the Mafia ended with no sentence handed down after a court in Palermo decided that, since no links could be proved after 1980, too much time had elapsed for Andreotti to be prosecuted.

The disbanding of the Christian Democrats after the mani pulite revelations did not spell the end of Andreotti, although his role in politics became increasingly peripheral. He died in Rome in 2013 at the age of 94.

The Palazzo Chigi in Rome is the official residence
of the Italian prime minister

Travel tip:

During the six and a half years in total that Giulio Andreotti was Italy's prime minister, his official residence was the Palazzo Chigi in Piazza Colonna, a square just off Via del Corso, about equidistant from the Trevi Fountain and the Pantheon. Originally built in 1580 for the Aldobrandi family - Ippolito Aldobrandi was Pope Clement VIII - it was bought by the Chigi family in 1659.  In 1878 it was acquired by the Austro-Hungarian empire to be the residence of their ambassador in Rome before the Italian state took ownership in 1916.

Travel tip:

First-time visitors to Rome might be daunted by the prospect of so much to see in such a large area and not know where to start.  In fact, most of the city's major attractions and contained within a four sided area that can be defined on a map by drawing a line between the Vatican and the Borghese Gardens, Stazione Termini, the Baths of Caracalla and back to the Vatican. Even so, it would take the best part of a week to see everything contained within that area.

More reading:

Alcide de Gasperi - the prime minister who rebuilt Italy

The kidnap and murder of Aldo Moro

Enrico Berlinguer - the leader who turned Italy's Communists into a political force

Also on this day:

1883: Birth of fashion designer Nina Ricci

(Picture credit: Palazzo Chigi by Jordiferrer via Wikimedia Commons)


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Tullio Levi-Civita – mathematician

Professor from Padua who was admired by Einstein

Tullio Levi-Civita

Tullio Levi-Civita, the mathematician renowned for his work in differential calculus and relativity theory, died on this day in 1941 in Rome.

With the collaboration of Gregorio Ricci-Curbastro, his professor at the University of Padua, Levi-Civita wrote a pioneering work on the calculus of tensors. Albert Einstein is said to have used this work as a resource in the development of the theory of general relativity.

Levi-Civita corresponded with Einstein about his theory of relativity between 1915 and 1917 and the letters he received from Einstein, carefully kept by Levi-Civita, show how much the two men respected each other.

Years later, when asked what he liked best about Italy, Einstein is reputed to have said ‘spaghetti and Levi-Civita.’

The mathematician, who was born into an Italian Jewish family in Padua in 1873, became an instructor at the University of Padua in 1898 after completing his own studies.

He became a professor of rational mechanics there in 1902 and married one of his own students, Libera Trevisani, in 1914.

Albert Einstein: the German physicist
held Levi-Civita in high regard

In 1917, having been inspired by Einstein’s theory of general relativity, Levi-Civita made his most important contribution to this branch of mathematics, the introduction of the concept of parallel displacement in general curved spaces.

This concept immediately found many applications and in relativity is the basis of the unified representation of electromagnetic and gravitational fields. In pure mathematics his concept was instrumental in the development of modern differential geometry.

Levi-Civita also worked in the fields of hydrodynamics and engineering. He made great advances in the study of collisions in the three-body problem, which involves the motion of three bodies as they revolve around each other.

His books on these subjects became standard works for mathematicians and his collected works were published in four volumes in 1954.

Levi-Civita was invited by Einstein to visit him in Princeton in America and he lived there for a while in 1936, returning to Italy with war looming.

He was removed from his post at the University of Rome in 1938 by the Fascist regime because of his Jewish origins, having taught there since 1918.

Deprived of his professorship and his membership of all academic societies by the Fascists, Levi-Civita became isolated from the scientific world and in 1941 he died at his apartment in Rome, aged 68.

Travel tip:

The University of Padua, where Levi-Civita studied and later taught, was established in 1222 and is one of the oldest in the world, second in Italy only to the University of Bologna. The main university building, Palazzo del Bò in Via VIII Febbraio in the centre of Padua, used to house the medical faculty. You can take a guided tour to see the pulpit used by Galileo when he taught at the university between 1592 and 1610.

The Caffè  Pedrocchi is an historic meeting place
for students and intellectuals in Padua

Travel tip:

Right in the centre of Padua, the Caffè Pedrocchi has been a meeting place for business people, students, intellectuals and writers for nearly 200 years. Founded by coffee maker Antonio Pedrocchi in 1831, the caffè was designed in neoclassical style and each side is edged with Corinthian columns. It quickly became a centre for the Risorgimento movement and was popular with students and artists because of its location close to Palazzo del Bò, the main university building. It became known as the caffè without doors, as it was open day and night for people to read, play cards and debate. Caffè Pedrocchi is now a Padua institution and a must-see sight for visitors, who can enjoy coffee, drinks and snacks all day in the elegant surroundings.

More reading:

Vincenzo Viviani - mathematician and scientist who worked with Galileo

How Evangelista Torricelli invented the barometer

The 18th century astronomer whose work still benefits astronauts today

Also on this day

1966: The birth of footballer Stefano Eranio


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