Traditional economic measures don’t fully capture the digital economy’s output, but this shortcoming isn’t significant enough to explain the recent slowdown in growth and productivity, says TD Economics.

In a new report, the bank’s economists observe that the growth in the digital economy in recent years coincides with a decline in traditional measures of inflation, real GDP and productivity. They thus address whether a sizeable share of economic output is being mismeasured.

The report notes that researchers have developed a variety of experimental methodologies in an effort to capture digital output. “Estimates tend to vary in scale, but most find that while mismeasurement does exist, it is not sufficient to explain the slowdown in real GDP and productivity growth,” it says.

Still, the report warns that the lack of accurate measurement could have implications for monetary and fiscal policy, as central banks rely on traditional statistics to guide their monetary policy decisions.

Fiscal policy is also typically guided by economic statistics. “For governments, accurate data is critical to analyzing returns to policy changes often meant to improve longer-run economic performance,” the report says. “This includes tax reform and research and development funding. Inaccurate data could alter or prematurely end such reforms and spending initiatives.”

TD says efforts are underway to address the issue. For example, Statistics Canada is currently working on a series of projects to better understand the digital economy, and other agencies, such as the U.S. Bureau of Economic Analysis, the OECD and the IMF, are also assessing how the digital economy affects macroeconomic statistics.

“To be sure, there is still a long way to go considering that research on the topic is still ongoing and most initiatives are still at the experimental stage,” the report says. “If successful, such efforts could help reduce measurement errors in the future and keep macroeconomic indicators from becoming obsolete.”