We study the impact of international long-distance flights on the global spatial allocation of economic activity. To identify causal effects, we exploit variation due to regulatory and technological constraints, which gives rise to a discontinuity in connectedness between cities at a distance of 6,000 miles. We show that improving an airport’s position in the network of air links has a positive effect on local economic activity, as captured by satellite-measured night lights. We find that air links increase business links, showing that the movement of people fosters the movement of capital. In particular, this is driven mostly by capital flowing from high-income to middle-income (but not low-income) countries. Taken together, the results suggest that increasing interconnectedness induces links between businesses and generates economic activity at the local level but also gives rise to increased spatial inequality locally, and potentially globally.

The rise of opinion programs has transformed television news. Because they present anchors’ subjective commentary and analysis, opinion programs often convey conflicting narratives about reality. We experimentally document that people across the ideological spectrum turn to opinion programs over “straight news”, even when provided large incentives to learn objective facts. We then examine the consequences of diverging narratives between opinion programs in a high-stakes setting: the early stages of the COVID-19 pandemic in the US. We find stark differences in the adoption of preventative behaviours among viewers of the two most popular opinion programs, both on the same network, which adopted opposing narratives about the threat posed by the COVID-19 pandemic. We then show that areas with greater relative viewership of the program downplaying the threat experienced a greater number of COVID-19 cases and deaths. Our evidence suggests that opinion programs may distort important beliefs and behaviours.