The launch of Sputnik by the Soviet Union in October 1957 led to a geopolitical crisis that reshaped American science policy. Within months, Congress established NASA, and by 1961, President Kennedy committed the nation to landing a man on the moon before the decade's end. The resulting investment was massive, and the program still serves as a model of government spending for advocates of public R&D.

In a paper in the American Economic Review, authors Shawn Kantor and Alexander Whalley question whether the space race program succeeded as an economic policy that boosted economic growth and productivity.

To estimate the space program's effects on economic growth from 1947 to 1992, the authors used data on NASA contractor spending and a novel identification strategy based on declassified CIA documents that allowed them to determine which US industries in which counties specialized in space-relevant technologies before the space race began. Their findings complicate the conventional narrative about public R&D and provide important context for current proposals to replicate so-called "moonshot" models in other domains.

Kantor and Whalley recently spoke with Tyler Smith about the local effects of space race spending and why they didn't translate into long-term productivity gains.