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.