Milton Friedman on Behavioral Economics Circa 1978

Ever since Freakonomics and Kahneman's Nobel prize, people have been writing articles about the radical new idea that people are not lightning-quick calculators complicated algorithms as economists always thought, but instead, real people! True enough, but it's useful to understand what rational really means, and why it's used so much by economists. Here's Milton Friedman (22:15ish) noting why it's basically about predicting what people do, on average, nothing more:



Also interesting, a fetching young Laura Tyson asks a question around 34:45. I think she's aged well too (Keynesians may be wrong, but they can be cute)

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