Henry Farrell on the stimulus debate:
The real debate between Tyler and Paul seems to me to be twofold. One is over the actual effectiveness of Keynesian policy in recessions – where Tyler seems to me to be not entirely opposed in theory, but largely skeptical in practice. I’m not sure that this can be easily resolved given the murkiness of the data (I’m inclined myself to think that demand stimulation works – but only on the balance of probabilities – the evidence seems to me to be strongly suggestive but not compelling). The second is over whether the countries in question are at or around the zero bound, where Keynesian fiscal policy (assuming it does work) is the best tool available. This seems to me to be more fruitful ground for an actual argument – there should be decent empirical indicators that we can use to figure this out.
I've also been meaning to link to Greg Mankiw's National Affairs essay on the difficulty of assessing stimulus. Mankiw's got a conservative bent, of course, but it's a very worthwhile critique.
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