Expanding economic activity in space may offer a solution to secular stagnation

Abstract

In this speculative article, I argue that the expansion of economic activity in space may offer a uniquely promising way to escape indefinitely from what economists call “secular stagnation,” a state of self-fulfilling, persistently sluggish economic growth that has increasingly threatened high-income countries. Economists have pointed to both supply-side and demand-side drivers of secular stagnation, and space as a focal point for investment can—at least in principle—address both. On the supply side, space is an unlimited frontier that, as have frontiers in the past, may inspire the individualism, innovation, and world-building needed to sustainably increase productivity and population growth. On the demand side, public investment toward increased economic activity in space could meaningfully add to aggregate demand if it reached historical peak benchmarks in the United States.

Advancing Science and Economy in Space: An Empirical Assessment of the Experiments Conducted on the International Space Station National Laboratory

“…Scientific experimentation in space is now continuous and replicable, and success is no longer narrowly defined by finishing tasks. As we are transitioning from the old to the new space era 24 , this paper addresses the gap in our understanding.…”

Space exploration and economic growth: New issues and horizons

“…Ref. 37 offers a unique solution to the problems of “secular stagnation”— a state of self-fulfilling, persistently sluggish economic growth—that plagues modern high-income economies ( 38 – 40 ). Modern theories of secular stagnation emphasize the need to sharply increase both aggregate demand and aggregate supply, e.g., through increased capital investment or growth in productivity or population.…”

“…Third, although space exploration has the potential to boost future economic growth and scientific progress ( 24 , 37 ), it comes at a time of increasing global income and wealth inequality ( 49 ) and unprecedented climate-driven disruption ( 50 – 53 ). While the transition to space mining may help meet ambitious climate goals without reducing economic growth ( 42 ), this transition may disrupt production patterns, potentially impacting workers in mining-dependent countries.…”