Debunking The Economic Impact Of The US Space Race

Shawn Kantor, a distinguished economics professor at Florida State University, has shed new light on the economic outcomes of the US space race. His research, co-authored with Alexander Whalley of the University of Calgary, challenges the long-held notion that the space race was a primary engine for broad American economic growth.

The study, published in the American Economic Review, reveals that massive public investment in research and development during the Cold War did not generate widespread technological spillovers. Instead, NASA contracts primarily benefited specific industries and regions, with limited signs of broader economic growth.

Kantor and Whalley developed a novel empirical strategy using declassified CIA documents to isolate the causal impact of NASA’s spending. By analyzing intelligence reports on Soviet space technology, they identified US industries and counties already specializing in space-relevant research before NASA’s major spending initiatives began.

According to phys. org, this research provides a nuanced interpretation of the space race’s role as a targeted, mission-driven industrial policy rather than a catalyst for economic-wide innovation. The findings suggest that the geopolitical benefits of the space race were real, but the economic outcomes were far more targeted and mission-driven than previously assumed.

The research highlights that the iconic moonshot mission has been treated as an economic miracle for decades, but Kantor and Whalley’s