We are entering a period where (space) trade frictions are falling, and new markets will be created as a result. Understanding the economic implications of the expansion of human activities into space is therefore essential.  Space as a new economic domain is rapidly expanding, with momentous (geo-)political, security and economic implications. This new domain of economic competition will generate new opportunities but also open up new challenges, requiring policymakers’ focus and action. 

This paper offers a new analytical framework to think about the economic uses of space, shedding light on the ways its unique properties can be harnessed for economic benefit. The authors draw on comparisons and lessons from theories of international trade, which over the past hundred years have developed sophisticated models to account for difficulties of access such as
barriers and distance, and modelled how these impact relative and absolute advantages of production.

The paper makes three fundamental points

1. With strong commercial activity already taking place in Low Earth Orbit since the late 1980s, space is today predominantly an economic area and, as such, should be worth of attention by the economics profession.
2. Launch costs have been on a very steep downward trend hitherto, even by historical comparison. 
3. As the space economy expands we should measure and think about it through the trade lenses.