Moonshot: Public R&D and Growth

Shawn Kantor and Alexander Whalley

American Economic Review, 2025, vol. 115, issue 9, 2891-2925

Abstract: We estimate the long-term effect of public R&D on growth in manufacturing by analyzing new data from the Cold War-era space race. We develop a novel empirical strategy that leverages US-Soviet rivalry in space technology to isolate windfall R&D spending. Our results demonstrate that public R&D conducted by NASA contractors increased manufacturing value added, employment, and capital accumulation in space-related sectors. While migration responses were important, they were not sufficient to generate a wedge between local and national effects. The iconic moonshot R&D program had only modest economic effects for both the local and national space-related sectors.

JEL-codes: E22 H54 L60 N12 N42 N62 O47 (search for similar items in EconPapers)
Date: 2025
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Working Paper: Moonshot: Public R&D and Growth (2023)
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DOI: 10.1257/aer.20220540

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