When Thomas Bayes Met Milton Friedman

Reverend Thomas Bayes’ view that belief is a basis of probability has led to the development of methods for repeatedly rubbing conditional probability distributions together in such a way so that they give birth to information drawn from a corresponding joint probability distribution. This information can interact with our beliefs to form a comprehensive inference about parameters that shape our world. Professor of Economics Philip Jefferson uses these methods to examine the relationship between consumption and income as embodied in a famous hypothesis by Professor Milton Friedman.