The Data Revolution and Economic Analysis

How new data may impact economic policy and economic research is discussed and whether the big data predictive modeling tools that have emerged in statistics and computer science may prove useful in economics is considered.

Abstract

Many believe that “big data” will transform business, government, and other aspects of the economy. In this article we discuss how new data may impact economic policy and economic research. Large-scale administrative data sets and proprietary private sector data can greatly improve the way we measure, track, and describe economic activity. They can also enable novel research designs that allow researchers to trace the consequences of different events or policies. We outline some of the challenges in accessing and making use of these data. We also consider whether the big data predictive modeling tools that have emerged in statistics and computer science may prove useful in economics.