Overview of the literature
Laura Veldkamp in this paper does a very thorough literature review of the effects of big data on the macroeconomy. Two of the most important effects are:
- Big data improves price flexibility but since monetary policy efficacy depends on price rigidity, the digital economy might reduce monetary policy effectiveness;
- Big data increases firm concentration: Use of big data in financial markets can significantly lower the cost of capital for large firms, relative to small ones. Cheaper financing enables large firms to grow larger.
Data and the Aggregate Economy
Author: Laura Veldkamp
From: Columbia University
Efficient use of data creates a virtuous loop
Farboodi and al. in this paper argue that data Data causes long-lived firms to grow bigger for two reasons. First, data helps firms become more productive. Productive firms invest more, grow larger, and produce more data. This is a “data feedback loop.” Second, firms invest more than they otherwise would because additional production generates more data. This is “active experimentation.”
Big Data and Firm Dynamics
Authors: Maryam Farboodi, Roxana Mihet, Thomas Philippon, Laura Veldkamp
From:Columbia University, MIT, New York University
Big data for public good
“Data collaboratives,” an emerging form of partnership in which participants exchange data for the public good, have huge potential to benefit society and improve artificial intelligence. But they must be designed responsibly and take data-privacy concerns into account.
Sharing Private Data for Public Good
By: Stefaan G. Verhulst – New York University
