  We build an endogenous growth model with consumer-generated data as a new key
factor for knowledge accumulation. Consumers balance between providing data for
profit and potential privacy infringement. Intermediate good producers use data
to innovate and contribute to the final good production, which fuels economic
growth. Data are dynamically nonrival with flexible ownership while their
production is endogenous and policy-dependent. Although a decentralized economy
can grow at the same rate (but are at different levels) as the social optimum
on the Balanced Growth Path, the R&D sector underemploys labor and overuses
data -- an inefficiency mitigated by subsidizing innovators instead of direct
data regulation. As a data economy emerges and matures, consumers' data
provision endogenously declines after a transitional acceleration, allaying
long-run privacy concerns but portending initial growth traps that call for
interventions.
