Growth in US productivity has slowed considerably over the past decade, and explanations abound as to why. But Wharton professor and author Jeremy Siegel says the reality may be that new innovations have led to flawed data that underestimates just how productive the US has been.

“New ways of producing goods and services may be causing the bean counters who measure GDP to underestimate both output and productivity,” Siegel writes in Kiplinger magazine. “For example, the development of GPS devices was a huge leap forward, and a decade ago sales of GPS devices were booming. But today most motorists use free GPS services on their mobile phones—and by definition, goods that are free are not counted in GDP. The same may be said of point-and-shoot cameras, whose sales have plunged since smartphones have taken over quick picture-taking.”

Siegel also says the Internet has allowed for very-low-cost or even free entertainment that doesn’t get factored into productivity data. “To the extent that the Commerce Department omits these items from GDP, we are either understating productivity and GDP growth or overstating the price we are paying,” he says.

The implications of all this are significant, implying “that inflation may actually be lower than the official government data,” Siegel says. “In either case, the Fed should proceed with caution until it better understands the source of plunging productivity. Tightening monetary policy prematurely might send the economy even further below the Fed’s inflation target.”