Does Wal Mart affect inflation?

Can a single retail company affect inflation? A recent National Bureau of Economic Research study argues that Wal-Mart’s size and lower-than-average prices have pushed the U.S. inflation rate substantially below what official statistics indicate. According to the study’s authors, the government’s current inflation metric assumes that lower prices at big-box discounters mean products of lower quality. But as the authors point out, the food products available at Wal-Mart tend to be exactly the same as those at local supermarkets, so customers don’t sacrifice quality by taking their business to the big discounter. When the authors corrected for Wal-Mart’s impact on the cost of food around the country, they found that from 1998 to 2001 the government had overstated increases in food prices by 14 to 18.3 percent’meaning, in turn, that the Bureau of Labor Statistics had overstated nationwide inflation by about 15 percent a year.