The “Great Recession” of 2007-2009 may be the first “Big Data” recession, i.e., the first recession which we can examine using the vast information delivered by the advent of Big Data. Certainly the next recession will be studied through that lens.
To test whether new data is available that can be cast in an economic framework, we must first ask: What newly available data emerged during the time that led up to the crisis and continued through it? I report on two examples here:
First, Wal-Mart–ever vigilant on the data front–observed that shoppers increasingly used gift cards in late 2007 and early 2008 to buy groceries and other basic items, rather than to buy electronics or DVDs as is usual . If companies like Wal-Mart are willing to provide such data to economists and policy makers, information about the nature of gift card purchases provides a window into how consumers are weathering economic difficulties.
Second, the number of Google searches for the price of gold (not the price of gold itself) has been identified as a leading indicator of consumer confidence . The emergence of Google Trends allows researchers to track the volume of given search terms over time and over geographical region, leading to immediate insight into how searches for the given terms are changing.
Studies such as these might lead to new predictors of recession, which we can use to avoid or lesson their effect.