Over the past decade, data has transformed everyday life. While it has changed the way people shop and businesses operate (Goldfarb and Tucker, 2019), it has only just begun to permeate economistsâ€™ thinking about the aggregate economy. In the early twentieth century, economists like Schultz (1943) analyzed agrarian economies and land-use issues. As agricultural productivity improved, production shifted more to manufacturing. Modern macroeconomics adapted with models featuring capital and labor, markets for goods, and equilibrium wages (Solow, 1956). Once again, productivity improvements have shifted the nature of production. In developed countries, the economy is no longer manufacturing-oriented. In the information age, production increasingly revolves around information and, specifically, data. This article explores the various ways that the growth of data interacts with classic macroeconomic questions, such as GDP measurement, monetary neutrality, growth and firm dynamics; it describes tools we already have to understand the data economy, and it compares and contrasts two frameworks that integrate data in a standard macroeconomic environment.
Veldkamp, Laura. "Data and the Aggregate Economy." Columbia Business School, October 30, 2019.
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