A Model of the Data Economy / Maryam Farboodi, Laura Veldkamp.

Format:

Book

Author/Creator:

Farboodi, Maryam.

Contributor:

National Bureau of Economic Research.

Veldkamp, Laura.

Series:

Working Paper Series (National Bureau of Economic Research) no. w28427.

NBER working paper series no. w28427

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

In a data economy, transactions of goods and services generate information, which is stored, traded and depreciates. How are the economics of this economy different from traditional production or innovation economies? How do these differences matter for measurement of GDP, firm values, depreciation rates, welfare and externalities? Despite incorporating active experimentation and data as an intangible asset, we devise a tractable recursive representation. Because the resulting model maps to many observable macro and finance measures, it can be calibrated and estimated like its old-economy DSGE counterpart. The model also delivers insights: It rationalizes why apps are often "free," why firm size is diverging and why even non-digital economic activity might be greater than GDP suggests.

Notes:

Print version record

February 2021.