Mankiw Does Not Seek to Inform

Reading over Greg Mankiw's recent post on the stimulus, it becomes rather apparent that Mankiw is looking to win a political - rather than economic - argument. Citing a now-famous paper by Romer and Romer, Mankiw states:

The Romers' conclusion, which is at odds with most traditional Keynesian analysis, was that the tax multiplier was 3 — in other words, that every dollar spent on tax cuts would boost GDP by $3. This would mean that the tax multiplier is roughly three times larger than Obama's advisors assumed it was during their policy simulations.

[snip]

But several studies on government-spending multipliers have been conducted using techniques similar to those used by the Romers.

[snip]

Ramey finds a government-spending multiplier of about 1.4 — a figure close to what the Obama administration assumed, but much smaller than the tax multiplier identified by the Romers.

Of course, back in early 2009, Brad Delong made the following comment:

The two studies [Romer and Romer, and Ramey] use very different methodologies. They are not comparable. For example, the Ramey study on the effects of government spending--while a superb contribution to the literature, and one that I have assigned to my graduate students--does not fully control for the tax increases that often accompany spending increases. Thus it is very likely to understate the effects of spending increases alone: her study assesses the impact of the Korean-War military spending increase without taking account of the fact that it was accompanied by a large tax increase.

And so we have Mankiw baldly asserting that "several studies on government-spending multipliers have been conducted using techniques similar to those used by the Romers", and Delong arguing the opposite while offering a persuasive argument about how they are different.

Mankiw offers two more examples of the stimulative superiority of tax cuts. I do not know enough about the first one (Mountford and Uhlig) to comment. However, the second one is garbage:

Alesina and Ardagna then separated those plans that were in fact followed by robust economic growth from those that were not, and compared their characteristics. They found that the stimulus packages that appeared to be successful had cut business and income taxes, while those that evidently did not succeed had increased government spending and transfer payments.

To believe that this proves anything is to be willfully blind. Read Paul Krugman.