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The most valuable firms in the global economy are valued largely for their data. Amazon, Apple, Google, and others have proven the competitive advantage of a good data set. And yet, despite the growing importance of data as a strategic asset, modern economic theory neglects its role. In this book, Isaac Baley and Laura Veldkamp draw on a range of theoretical frameworks at the forefront of research in macroeconomics and finance to model and measure data-driven economies. Starting from the premise that data is digitized information that facilitates prediction and reduces uncertainty, Baley and Veldkamp uncover the ways that firm-level data choices resonate throughout the broader macroeconomic and financial landscapes. Applications include assessing the economic value of data and unraveling its impact on production, inflation, and pricing dynamics; firm and investor behavior; advertising; market power; and asset pricing. Baley and Veldkamp bring readers to the cutting edge of this novel research area, equipping them to formulate their own theoretical advances and policy analysis. More on Wikipedia |
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Teaching Resources
Instructors can request slides and the solution manual. Please email me from an official university or institutional account.
Instructors can request slides and the solution manual. Please email me from an official university or institutional account.
Journal Articles About Book
Bryan, Kevin A. (2025). "The Economic Impacts of AI: A Multidisciplinary, Multibook Review." Journal of Economic Literature.
Gomes, Orlando (2025). "Baley, I. and L.L. Veldkamp (2025). The data economy. tools and applications. Princeton, NJ: Princeton University Press". Journal of Evolutionary Economics. 35 (2): 381–385.
Bryan, Kevin A. (2025). "The Economic Impacts of AI: A Multidisciplinary, Multibook Review." Journal of Economic Literature.
Gomes, Orlando (2025). "Baley, I. and L.L. Veldkamp (2025). The data economy. tools and applications. Princeton, NJ: Princeton University Press". Journal of Evolutionary Economics. 35 (2): 381–385.
Press
Faculti Video Nada es Gratis (In Spanish) 5cèntims (In Catalan) Society of Professional Economists
Faculti Video Nada es Gratis (In Spanish) 5cèntims (In Catalan) Society of Professional Economists
Praise
“Baley and Veldkamp once again prove that they are pros at using tools from economics, statistics, and information theory to analyze technologies and choices that are reshaping today’s economies. This book is a gold mine of insights about data and how to extract information that it contains about parameters that can inform decisions.”
Thomas J. Sargent, Winner of the 2011 Nobel Prize in Economics
“In The Data Economy, the authors draw on their own and others’ extensive work on data as digitized information to improve prediction and reduce uncertainty. Going beyond information theory, Baley and Veldkamp provide students and researchers with a bevy of tools, models, and applications for the data economy. This collection should spark an explosion of research—to match the explosion in data and its potential impact.”
Janice Eberly, Kellogg School of Management
“Some books aim to provide comprehensive treatments of mature research topics. Others, like this one, succeed by posing challenging new questions. The authors have done a masterful job of both surveying existing research tools that are pertinent to the study of the information economy and posing important new questions to investigate. Their speculative models lead the way in exploring the economic role of modern high-speed and high-volume data accessibility from a macroeconomic perspective. I recommend this fascinating book to all scholars looking for a thought-providing treatment of this emerging field.”
Lars Peter Hansen, Winner of the 2013 Nobel Prize in Economics
“Baley and Veldkamp have written the modern guide to the economics of data. Merging their expertise in macroeconomics and finance, they provide detailed theories of what makes Google, Meta, and Amazon so valuable. Highly recommended!”
Charles I. Jones, Stanford Graduate School of Business
“Baley and Veldkamp once again prove that they are pros at using tools from economics, statistics, and information theory to analyze technologies and choices that are reshaping today’s economies. This book is a gold mine of insights about data and how to extract information that it contains about parameters that can inform decisions.”
Thomas J. Sargent, Winner of the 2011 Nobel Prize in Economics
“In The Data Economy, the authors draw on their own and others’ extensive work on data as digitized information to improve prediction and reduce uncertainty. Going beyond information theory, Baley and Veldkamp provide students and researchers with a bevy of tools, models, and applications for the data economy. This collection should spark an explosion of research—to match the explosion in data and its potential impact.”
Janice Eberly, Kellogg School of Management
“Some books aim to provide comprehensive treatments of mature research topics. Others, like this one, succeed by posing challenging new questions. The authors have done a masterful job of both surveying existing research tools that are pertinent to the study of the information economy and posing important new questions to investigate. Their speculative models lead the way in exploring the economic role of modern high-speed and high-volume data accessibility from a macroeconomic perspective. I recommend this fascinating book to all scholars looking for a thought-providing treatment of this emerging field.”
Lars Peter Hansen, Winner of the 2013 Nobel Prize in Economics
“Baley and Veldkamp have written the modern guide to the economics of data. Merging their expertise in macroeconomics and finance, they provide detailed theories of what makes Google, Meta, and Amazon so valuable. Highly recommended!”
Charles I. Jones, Stanford Graduate School of Business
