When Thomas Bayes Met Milton Friedman

Professor of Economics Philip Jefferson examines the relationship between consumption and income as embodied in a famous hypothesis by Professor Milton Friedman.

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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.