Data, Privacy, and Artificial Intelligence

This article explores a data economy to study how privacy, automation, and artificial intelligence affect labor allocation, economic growth, and income distribution. We introduce three types of sector-specific data and postulate that raw data violate individual privacy but are used as a nonrival input in productdata and R&D-data production. We explain how locally excludable product and R&D data generate an advance in automation and knowledge, thereby leading to labor share across the production and R&D sectors and affecting economic performance, including persistent economic growth and improvement of individual welfare with privacy. This article concludes that a data economy with sector-specific data displays a stark difference in the usual equilibrium dynamics of persistently growing economies