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Instructions for installing fiberglass batts with paper vapor barrier call for the edge tab to be attached to the inside face of the stud to allow for an air gap when the dry wall panels are installed. However, I have seen plastic installed in a continuous sheet covering the outside edge of the studs resulting in no vapor barrier. So, air gap or no air gap?
 

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We haven't had paper back here for years but when I was a kid they had the same instructions. Makes no sense, with stud being very low R value and you are going to make it pucker there. But back then we were putting 2" in a 2x4 wall so maybe it meant something then.
 

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Did the insulation instructions specifically mention an air gap?

Just stapling the insulation paper edge to the studs never results in an airtight seal. But I think air leakage is harmful because less than dessicated basement air would condense moisture on the inside of the sheathing on a cold day and possibly into the back of the fiber glass batt where mold could then grow.

The plastic continuous sheet over the batts aand just inside the drywall or paneling gives a better moisture block. Come spring and summer the tiny amount of moisture that got through should have little difficulty migrating all the way through the sheathing and to the outside.
 
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