NBER: Data Centers and Local Economies in the Age of AI
The National Bureau of Economic Research has released a working paper examining the impact of data centers on local economies in the context of increasing artificial intelligence demand. The study finds that while data centers can boost local employment and investment, they also raise concerns regarding electricity demand and housing prices. The research highlights the complex trade-offs that local policymakers face when considering the expansion of data centers.
- ▪Data centers are essential for cloud computing and AI, leading to increased investment and demand.
- ▪The study shows positive effects on local employment, construction, and housing prices due to data center growth.
- ▪However, the expansion of data centers also raises concerns about electricity demand and local environmental impacts.
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Record
| Original publisher | NBER |
| Canonical URL | https://www.nber.org/papers/w35194 |
| Publication time | Sat, 30 May 2026 16:13:12 +0000 |
| Retrieval time | 2026-05-30T16:24:38.811Z |
| Last seen | 2026-05-30T16:24:38.811Z |
| Headline source | Publisher (no WeSearch rewrite) |
| Excerpt source | publisher body |
| Excerpt method | First ~120 words (~800 chars) of extracted publisher body, fair-use limited. |
| Summary | WeSearch · cerebras-chat (WeSearch summarizer) |
| Summary source text | contentText |
| Citation coverage | Summary is a WeSearch-generated derivative; primary citation is the original publisher URL. |
| Cluster | sUrW1btiQwaE |
| Cluster logic | Grouped by semantic title/content similarity across sources within a rolling window. Same-publisher template collisions are excluded from coverage comparison. |
| Ranking reason | Story pages are not engagement-ranked. Hub feeds use recency, with optional source-diversified chronological ordering (cap consecutive stories per source). No personalized ranking. |
| Publisher visit | Yes — open original |
| Substitutes article? | No — link-out required for full text |
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| Indexing | May the item be indexed (stored, ranked, made findable)? | Allowed |
| Snippet | May a short excerpt of the publisher's text be shown? | Allowed |
| AI summary | May WeSearch generate its own short summary of the article? | Limited |
| Retrieval / RAG | May the content be exposed for third-party retrieval-augmented generation? | Not asserted |
| Model training | May the content be used to train AI models? | Not asserted |
| Commercial reuse | May the content be reused commercially? | Not permitted |
Basis: Derived from the published RSS/Atom feed. Contact: [email protected]. Reviewed: 2026-07-24.
Opening excerpt (first ~120 words) tap to expand
Home Research Working Papers Data Centers and Local Economies in the… Data Centers and Local Economies in the Age of AI: A Shift--Share Approach Fernando E. Alvarez, David Argente, Joyce Chow & Diana Van Patten Share X LinkedIn Facebook Bluesky Threads Email Link Working Paper 35194 DOI 10.3386/w35194 Issue Date May 2026 Data centers are the physical infrastructure behind cloud computing, artificial intelligence, and enterprise software. The rapid diffusion of artificial intelligence (AI) is intensifying demand for compute, accelerating investment in data centers, and raising concerns about the local economic and environmental footprint of these facilities. Their expansion creates a local policy tradeoff.
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Excerpt limited to ~120 words for fair-use compliance. The full article is at NBER.
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