American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Moonshot: Public R&D and Growth
American Economic Review
(pp. 2891–2925)
(Complimentary)
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.Citation
Kantor, Shawn, and Alexander Whalley. 2025. "Moonshot: Public R&D and Growth." American Economic Review 115 (9): 2891–2925. DOI: 10.1257/aer.20220540Additional Materials
JEL Classification
- E22 Investment; Capital; Intangible Capital; Capacity
- H54 National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock
- L60 Industry Studies: Manufacturing: General
- N12 Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: U.S.; Canada: 1913-
- N42 Economic History: Government, War, Law, International Relations, and Regulation: U.S.; Canada: 1913-
- N62 Economic History: Manufacturing and Construction: U.S.; Canada: 1913-
- O47 Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence