Synopsis
Here is a summary of the research article:
- The paper proposes a macroeconomic model to analyze the relationship between space investment and technological spillovers that support economic growth.
- The model is estimated using US data from 1960-2018, including sectoral data for the space industry.
- The key finding is that space activities have provided positive growth spillovers to the broader economy, but the intensity of these spillovers has declined over time.
- Spillovers peaked from the late 1960s to early 1980s during the Apollo program era. Recent space activities by private companies like SpaceX have a much lower estimated economic impact.
- Simulations quantify the decline in spillovers – increasing space production by the same amount generates over twice the output gains when associated with the high historical spillovers versus the low recent spillovers.
- The high historical spillovers could help close the growth gap after recessions like COVID-19 more quickly than the low recent spillovers.
- The results suggest exploiting space sector spillovers through appropriate policies could provide substantial economic gains, especially in countering stagnant growth or deep recessions.
In summary, the study provides empirical evidence that past space activities have created positive technological spillovers and growth for the broader economy, but spillovers have declined over time as space spending has shifted from public to private sources. Policymakers may be able to generate substantial economic gains by increasing space spending, but these gains are estimated to be much lower now than in the 1960s-1980s Apollo era.
