NASA Report May Overstate the Economic Benefits of Research and Development Spending

PAD-78-18: Published: Oct 18, 1977. Publicly Released: Oct 18, 1977.

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The National Aeronautics and Space Administration (NASA) contracted with Chase Econometrics Associates, Inc., to evaluate how research and development (R&D) spending affects the U.S. economy.

The Chase report "The Economic Impact of NASA R&D Spending" concluded that this spending produced many benefits between 1960 and 1974, although it did not try to evaluate how effectively NASA carried out its primary objectives, such as space exploration and satellite communication. Although the study is useful as exploratory research, other types of studies are necessary to provide a complete evaluation of NASA research and development. The most significant conclusion of the Chase study was that ". . . a $1 billion sustained increase in NASA R&D spending will raise real GNP $23 billion by 1984 . . . ." Of this estimated increase, $21 billion would result from improved technology and productivity and the rest would result from increased Government spending which would stimulate spending in different parts of the economy. The Chase study did not prove convincingly that the benefits of R&D spending are as large as stated.

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