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Temporary vs. Permanent
EconLog: Library of Economics and Liberty — Tyler Cowen weighs in on an issue that has been bouncing around the blogosphere. Overall the Keynesian effects can mean either the permanent or the temporary spending boost has a bigger effect and there are also a number of ways of defining what a "bigger effect" might mean. I assume that when a household gets a check from the government--either a tax rebate or a spending payment--the household assumes that someone else is paying for it. That is, I break Ricardian equivalence. However, bondholders are forward-looking, so that a permanent increase in spending raises interest ...

I do not think that word …
Paul Krugman — … means what Tyler Cowen and Megan McArdle think it means. The word in question is “spending.” Tyler’s latest on temporary versus permanent government consumption clarifies what the confusion is over my ...

Economics of Government Spending
Lawrance G. Lux — ... Tyler Cowen brings a good discussion of Keynesian effect to the discussion. I know only that long-run economic performance determines the capital investment made into the sectors, and that investment schedules are particularly immune to Keynesian spending past the immediate period of that expenditure. The market corrects for impression mistakes in rapid order, and it is likely that Keynesian spending should be compressed to have any effect. I believe the problem with Keynesian spending is that it insists on continuous provision of funds to maintain a constant performance; this ...

First, We Kill All the Economists
Paul Kedrosky's Infectious Greed — ... inability of prominent economists to talk to one another in the same language with words meaning the same thing and not freighted with a metric ton (or ten) of political baggage. Another temporary misunderstanding (Krugman) Permanent vs. temporary increases in government consumption (Cowen) Read before linking (wonkish) (Krugman) Permanent vs. temporary increases in government spending, a Keynesian approach (Cowen) I do not think that word … (Krugman) If nothing else, ...

Lying Stimuli
Overcoming Bias — ... from B, not only do A and B benefit but the downturn is reduced a bit as well.  (In an upturn, extra activity arguably exasperates the boom-bust cycle.)  This fact can justify subsidizing economic activity a bit more (or taxing it a bit less) during a downturn.  But it turns out this isn't the main rationale for the "economic stimuli" now being debated; those plans are largely based on the idea that people can be fooled because they are biased.  Tyler Cowen:  ...