Black, Fischer (1938–1995)

US economist who was the first to conceive of the pricing of options as an application of general equilibrium theory. For this reason the Black-Merton-Scholes formula (with Robert C Merton and Myron S Scholes) for pricing stock options is so named in order to pay tribute to his pioneering articles in the 1970s on option price theory. His Exploring General Equilibrium Theory (1995) also revealed his wide-ranging interests in business cycles and monetary policy, all treated as practical applications of general equilibrium theory.

Black graduated from Harvard University in 1959, received his PhD from Harvard in 1964, and then worked as a management consultant. He joined the University of Chicago as a visiting professor (1971–72) and subsequently as professor of finance. He moved to MIT in 1975, but left academic life in 1984 to become a partner of Goldman, Sachs & Co. Two years after his death Merton and Scholes were awarded the Nobel Prize in Economics for their work on the valuation of options. Other publications include Business Cycles and Equilibrium (1987).