Showing papers in "Revista Brasileira De Economia in 2003"
TL;DR: This paper presented a poverty profile for Brazil, based on three different sources of household data for 1996, using PPV consumption data to estimate poverty and indigence lines, and verified robustness of the profile with respect to different poverty lines, spatial price deflators, and equivalence scales.
Abstract: This paper presents a poverty profile for Brazil, based on three different sources of household data for 1996. We use PPV consumption data to estimate poverty and indigence lines. ''Contagem'' data is used to allow for an unprecedented refinement of the country's poverty map. Poverty measures and shares are also presented for a wide range of population subgroups, based on the PNAD 1996, with new adjustments for imputed rents and spatial differences in cost of living. Robustness of the profile is verified with respect to different poverty lines, spatial price deflators, and equivalence scales. Overall poverty incidence ranges from 23% with respect to an indigence line to 45% with respect to a more generous poverty line. More importantly, however, poverty is found to vary significantly across regions and city sizes, with rural areas, small and medium towns and the metropolitan peripheries of the North and Northeast regions being poorest.
92 citations
TL;DR: In this paper, the authors investigated monetary policy and basic macroeconomic relationships involving output, inflation rate, interest rate, and money in Brazil based on a vector autoregressive (VAR) estimation.
Abstract: This paper investigates monetary policy and basic macroeconomic relationships involving output, inflation rate, interest rate, and money in Brazil. Based on a vector autoregressive (VAR) estimation, it compares three different periods: moderately-increasing inflation (1975-1985), high inflation (1985-1994), and low inflation (1994-2000). The main results are the following: monetary policy shocks have significant effects on output; monetary policy shocks do not induce a reduction in the inflation rate in the first two periods, but there are indications that they have gained power to affect prices after the Real Plan was launched; monetary policy does not usually respond rapidly or actively to inflation-rate and output innovations; in the recent period, the interest rate responds intensely to financial crises; positive interest-rate shocks are accompanied by a decline in money in all the three periods; the degree of inflation persistence is substantially lower in the recent period.
87 citations
TL;DR: In this article, a study on the decisoes de investimento das firmas brasileiras sao afetadas by restricoes ao credit, usando dados de balanco de firmas entre 1986 and 1997.
Abstract: Este artigo investiga se as decisoes de investimento das firmas brasileiras sao afetadas por restricoes ao credito, usando dados de balanco de firmas entre 1986 e 1997. Os resultados empiricos indicam que as firmas brasileiras sofrem de restricao a credito, e que os unicos casos em que a restricao teve efeito mais suave ocorreram entre grandes firmas e multinacionais, no periodo entre 1994 e 1997.
84 citations
TL;DR: In this article, the authors assess health care services delivered in ambulatories and hospitals in the municipalities of the state of Rio de Janeiro, Brazil, based on the use of non-stochastic frontiers models (data envelopment analysis combined with regression techniques.
Abstract: The present paper assesses health care services delivered in ambulatories and hospitals in the municipalities of the state of Rio de Janeiro, Brazil. The assessment is based on the use of non-stochastic frontiers models (data envelopment analysis - DEA) combined with regression techniques. By taking advantage of resources and production data, optimal levels of consumption and services are obtained. The paper shows relationships related to technical efficiency, GDP, population size and average length-of-stay.
64 citations
TL;DR: In this paper, the authors present a study whose goal was to characterize the evolution of the agricultural modernization process in the Brazilian states and find that the intensity of the modernization process was significantly different among the states.
Abstract: This paper presents a study whose goal was to characterize the evolution of the agricultural modernization process in the Brazilian states. Factor analysis was applied to a group of variables related to the use of the main modern technologies. The results have led to the conclusion that the intensity of the modernization process was significantly different among the states. Since 1980, that process is becoming less intense, with the reduction in the values associated to the financing level and investments in agriculture, phenomenon related to the decrease in the offer of rural credit and the elevation of its cost. Possibly, this was also influenced by market retraction, lower expectations and increasing risks, events observed in the 1980s.
33 citations
TL;DR: In this paper, the authors address the issue of measuring the degree of inertia in inflation in the presence of potential "inliers" and show that by using robust unit root tests one reaches the same inference on the order of integration of the series as what is revealed by the modified procedure proposed by Cati et al.
Abstract: This paper addresses the issue of measuring the degree of inertia in inflation in the presence of potential 'inliers'. It shows that by using robust unit root tests one reaches the same inference on the order of integration of the series as what is revealed by the modified procedure proposed by Cati et al. (1999). The results also suggest that, contrary to previous findings, the degree of inertia in inflation is rather small. Finally, the paper presents simulation results on the finite-sample behavior of unit root tests and of a persistence measure when the data contain inliers.
31 citations
TL;DR: In this article, the authors analyzed the contribution of components of per capita household income to total inequality of the income distribution in Brazil and its regions, using the corresponding decomposition of the Gini index.
Abstract: This paper analyzes the contribution of components of per capita household income to total inequality of the income distribution in Brazil and its regions, using the corresponding decomposition of the Gini index. The income components considered are: income from the main job (activity), income from other jobs, pensions, donations, rent, interest, and other incomes. Only income from the main job and donations have a concentration ratio that is lower than the overall Gini index. One of the main results is that income from pensions contributes to increase overall inequality in Brazil, particularly in the metropolitan regions. Given the aging of the population, without change in the pension rules, the contribution of pensions in increasing inequality will be even stronger in the future.
30 citations
Abstract: Using Brazilian financial data provided by BMF we test the expectations hypothesis of interest rates present value models (Campbell and Shiller, 1987). The empirical results are ambiguos: we find a common factor for ''long'' and short interest rates (cointegration), but present-value restrictions are rejected at 10% significance but not at 5%.
29 citations
TL;DR: In this article, the authors investigate the relationship between skill upgrading and measures of technology in Brazilian manufacturing for the last two decades and find robust evidence of technology-skill complementarity, especially for the period between 1994 and 1997.
Abstract: The main aim of this paper is to investigate the relationship between skill upgrading and measures of technology in Brazilian manufacturing for the last two decades. We use R&D intensity as a proxy for technological change. We find robust evidence of technology-skill complementarity, especially for the period between 1994 and 1997. Furthermore, when U.S. R&D intensity is used as an instrument for Brazilian R&D intensity, its impact on skill demand rises threefold. This provides us with evidence that technological transfer is impacting skill-upgrading in Brazil.
26 citations
TL;DR: In this paper, the authors apply predictive hability tests developed by White (2000) in order to measure whether these strategies are capable of producing excess returns relative to the buy-and-hold strategy.
Abstract: The purpose of this paper is to test market efficiency by using the so-called ''technical analysis'' investment strategies. We apply predictive hability tests developed by White (2000) in order to measure whether these strategies are capable of producing excess returns relative to the buy-and-hold strategy. It considers the possibilty of data-snooping, allowing the detection of models whose seemingly good performance are in fact due only to chance. Our results indicate that technical analysis is not profitable and should not be used by investors, being in line with weak-form efficient market hypothesis predictions.
24 citations
TL;DR: A discussao das propostas de reforma tributaria raramente tem considerado os efeitos de mudancas no sistema tributario sobre os estados e municipios brasileiros as discussed by the authors.
Abstract: A discussao das propostas de reforma tributaria raramente tem considerado os efeitos de mudancas no sistema tributario sobre os estados e municipios brasileiros. Alem disso, quando os efeitos espaciais sao considerados, a falta de informacoes consistentes e de instrumentais formais de analise nao permite que se produzam subsidios relevantes para a formulacao de recomendacoes de politica. Assim, faz-se necessario o desenvolvimento de instrumentais analiticos, baseados em dados solidos e consistentes, que sejam capazes de avaliar esses impactos levando-se em consideracao a estrutura do sistema regional brasileiro. O presente artigo aborda um aspecto central da metodologia utilizada em inumeros trabalhos sobre reforma/politica tributaria, avaliando quantitativamente a endogeneidade da base tributaria, alteracao de precos relativos e substituicao de insumos em nivel setorial e regional por meio de um modelo inter-regional de equilibrio geral computavel. A metodologia adotada possibilita o estudo rigoroso e consistente de implicacoes espaciais de curto e longo prazo, com consequencias importantes para politicas de planejamento regional.
TL;DR: In this article, the authors investigated the contribution of intra-industry trade to the growth of the Brazilian intra-block trade flow, and if this flow could be relatively more significant than the extra-block to the total multilateral intra industry trade.
Abstract: The object of study of this work is to investigate the contribution of the intra-industry trade to the growth of the Brazilian intra-block trade flow, and if this flow could be relatively more significant than the extra-block to the growth of the total multilateral intra-industry trade. A conclusion is that when analysing the Brazil-MERCOSUR bilateral trade flow, an increasing significance of the intra-industry type of trade in this flow was observed.
TL;DR: In this paper, the authors estimate the Brazilian NAIRU (Nonaccelerating Inflation Rate of Unemployment) and investigate several empirical questions, such as the stability of coefficients of the Brazilian price Phillips curve, the behavior of the NIRU along time, and error bands for the NNIRU.
Abstract: This paper estimates the Brazilian NAIRU (Nonaccelerating Inflation Rate of Unemployment) and investigates several empirical questions: the stability of coefficients of the Brazilian price Phillips curve, the behavior of the NAIRU along time, and error bands for the NAIRU. This article innovates, with respect to previous research work done for Brazil, because it estimates error bands for the NAIRU and adopts econometric models that, in our judgment, deal more adequately with the still recent instability of the Brazilian economy. We estimate two different state-space models: one with a time-varying NAIRU and another in which the NAIRU is changing over time according to a hidden Markov chain specification. The study presents some new evidence on several questions. It shows that while the slope of the Brazilian price Phillips curve is stable the NAIRU has not been stable. It concludes that there is a statistically significant relationship, with correct sign, between deviations of unemployment from the NAIRU and inflation. It also shows that, after the second semester of 1995, there is no significant evidence that the NAIRU has been different from the observed unemployment rate.
TL;DR: In this paper, the authors test the empirical validity of the absolute version of PPP and uncovered interest parity (UIP) to Brazilian data using the cointegration analysis developed by Johansen.
Abstract: The goal of this article is to test the empirical validity of the absolute version of Purchasing Power Parity (PPP) and Uncovered Interest Parity (UIP) to Brazilian data using the cointegration analysis developed by Johansen. The period covered by the sample was 1980:1 to 1994:2 (quarterly data). Some of the series used in this work are I(2) and the cointegration analysis become more complex. The methodology to treat this problem will be discussed briefly. The results of the tests are not favorable to absolute version of the Purchasing Power Parity. The results show that deviations from PPP are related to interest rate differentials.
TL;DR: In this paper, the authors evaluate the impact of the Brazilian General Social Security Regime (RGPS) on social welfare and show that a pay-as-you-go social security scheme may present a welfare gain compared to a fully saving-funded system.
Abstract: This article aims to evaluate the impact of the Brazilian General Social Security Regime (RGPS) on social welfare. To this end, an overlapping generation model calibrated to reproduce empirical facts of the country's economy is numerically simulated. The artificial economy considers the fact that the agent's life span and per period employment condition are uncertain and also includes the hypothesis of credit restriction. The results show that a pay-as-you-go social security scheme may present a welfare gain compared to a fully saving-funded system. This conclusion depends on the value attributed to the intertemporal discount factor.
TL;DR: In this paper, the authors make a review of the main of the models of discrimination and examine the possible sources of racial and gender discrimination in the labor market and show that the discriminatory behavior of the employers is inversely related to the profits of the firms.
Abstract: The paper makes a review of the main of the models of discrimination and examines the possible sources of racial and gender discrimination in the labor market. From a theoretical point of view, the model shows that the discriminatory behavior of the employers is inversely related to the profits of the firms. The models of statistical discrimination assume that the creditor or employers don't have complete information on the individuals. These models use the characteristics of the groups that suffer discrimination, as race or its sex, to reduce the value of the credit or of the wage.
TL;DR: In this article, the authors examined the relationship between the sociodemographic characteristics of small settlers in the Brazilian Amazon and the life cycle hypothesis in the process of deforestation by combining remote sensing and geographic data with primary data of 153 small settlers along the Transamazon Highway.
Abstract: This paper examines the relationships between the sociodemographic characteristics of small settlers in the Brazilian Amazon and the life cycle hypothesis in the process of deforestation. The analysis was conducted combining remote sensing and geographic data with primary data of 153 small settlers along the Transamazon Highway. Regression analyses and spatial autocorrelation tests were conducted. The results from the empirical model indicate that sociodemographic characteristics of households, as well as institutional and market factors, affect the land use decision. Although remotely sensed information are not yet very popular among Brazilian social scientists, these results confirm that they can be very useful for this kind of study. Furthermore, the research presented by this paper strongly indicates that family and sociodemographic data, as well as market data, may result in misspecification problems. The same applies to models that do not incorporate spatial analysis.
TL;DR: In this paper, a maior parte dos artigos contesta a base teorica e a observacao empirica de ocorrencia de partilha do trabalho.
Abstract: A reducao da jornada de trabalho de 44 para 40 horas semanais tem sido frequentemente proposta pelas centrais sindicais como solucao para a escassa geracao de empregos no pais. A ideia, conhecida como partilha do trabalho (work-sharing), e que a reducao de jornada permitiria que o mesmo trabalho fosse repartido por mais trabalhadores. No entanto, a maior parte dos artigos contesta a base teorica e a observacao empirica de ocorrencia de partilha do trabalho. O objetivo deste artigo e estudar os efeitos da reducao de jornada prescrita pela Constituicao de 1988, de 48 para 44 horas por semana, sobre o mercado de trabalho no Brasil. Os resultados do exercicio empirico mostram que as alteracoes da Constituicao, referentes a jornada de trabalho, provocaram uma queda da jornada efetiva de trabalho, nao aumentaram a probabilidade de o trabalhador afetado pela mudanca ficar desempregado em 1989 (quando comparada a outros anos), diminuiram a probabilidade de o trabalhador afetado de ficar sem emprego em 1989 (o que inclui os que sairam da forca de trabalho) e implicaram um aumento do salario real horario (apesar de menor do que o observado para trabalhadores que reduziram a jornada em outros anos). Esses resultados indicam que, no curto prazo (nos 12 meses seguintes a mudanca constitucional), a reducao de jornada nao teve efeitos negativos sobre o emprego.
TL;DR: In this article, the authors characterized 1994 and 1999 as points of fiscal consolidation, and the 1994 consolidation can not be considered successful since after that period the debt to GDP ratio has grown continuously.
Abstract: Two questions are addressed in this paper. The first one is the determination of periods of fiscal consolidation and fiscal stimulus. The second one is the importance of the composition of fiscal adjustments for their success, defined as a declining debt to GDP ratio. We, characterize 1994 and 1999 as points of fiscal consolidation. The 1994 consolidation can not be considered successful since after that period the debt to GDP ratio has grown continuously. The adjustment can be characterized as a type 2 adjustment (Alesina and Perotti (1997)) in the sense that cuts were made mainly in public investment, while government wages and transfers remained almost unchanged. This type of adjustment usually has a low likelihood of being a success.
TL;DR: The authors argue that desinflacoes tend to be acompanhadas de queda no produto utilizando-se do arcabouco da teoria dos jogos evolucionarios.
Abstract: Este artigo busca justificar a evidencia casual de que desinflacoes monetarias tendem a ser acompanhadas de queda no produto utilizando-se do arcabouco da teoria dos jogos evolucionarios. A aplicacao deste arcabouco tem o seu apelo porque combina duas hipoteses frequentemente apontadas como responsaveis pelo fato de que desinflacoes criveis tem custos: racionalidade limitada e falha de coordenacao. A analise das desinflacoes constitui-se na analise da transicao entre dois equilibrios estacionarios. A dinâmica da economia em direcao ao novo equilibrio do jogo de estabelecimento de precos e dada pela dinâmica replicadora, que usa uma regra de selecao de estrategias simples e intuitiva: estrategias que apresentam desempenho pior que a media tem sua utilizacao reduzida ao longo do tempo. O custo da desinflacao em nosso modelo depende do quao rapido agentes passivos, que continuam a adotar a estrategia que era otima para o equilibrio inflacionario, se convertem em agentes ativos, que adotam estrategias maximizadoras durante a transicao.
TL;DR: In this article, a new organizational structure in which neighboring health districts in Brazil form a partnership to jointly supply costly specialized health care services was studied, and the main conclusion is that the partnership sustainability is strongly influenced by the punishment mechanisms to a defaulting member, the gains from joint provision of health services and the overall economic environment.
Abstract: The present article studies a new organizational structure in which neighboring health districts in Brazil form a partnership to jointly supply costly specialized health care services. Each district partially funds the organization. Depending on the partnership contract, a free rider problem arises. A district has the incentive to withdraw from the partnership if it can still benefit from its services, especially when political pressures for competing expenditures arise. The main conclusion is that the partnership sustainability is strongly influenced by the punishment mechanisms to a defaulting member, the gains from joint provision of health services and the overall economic environment.
TL;DR: In this article, the authors evaluate the mechanisms of corporate governance currently at work in the United States and argue that the evidence provided by the existing corporate governance literature supports the following propositions: 1) the legal and regulatory framework actually restrains the scope for expropriating minority shareholders.
Abstract: This paper aims at evaluating the mechanisms of corporate governance currently at work in the United States. Section 1 turns its focus to the reasons accounting for the still relative scarceness of large shareholders in American publicly held companies. The analysis thereafter concentrates on assessing the efficacy of each of the pillars purportedly buttressing the American system of corporate control. The paper argues that the evidence provided by the existing corporate governance literature supports the following propositions: 1) the legal and regulatory framework actually restrains the scope for expropriating minority shareholders, though at the cost of inhibiting institutional investor activism; 2) as a rule, the board of directors do not comply with their mandatory duty of overseeing management, although some progress has recently been made, with directors in several companies becoming less submissive to chief executive officers; 3) the market for corporate control encounters a great number of difficulties (ranging from legal hurdles to high transaction costs and to serious free-riding problems), which are sufficient to cast a cloud on its reliability as a means of repressing managerial inefficiencies and rent-seeking; 4) competition in the product and capital markets is likely to produce effects only in the long-run.
TL;DR: The authors developed a post-keynesian macrodynamic model of capacity utilization, distribution and conflict inflation, in which the supply of credit-money is endogenous and the nominal interest rate is determined by banks as a markup over the base rate, which is set by the monetary authority.
Abstract: It is developed a post-keynesian macrodynamic model of capacity utilization, distribution and conflict inflation, in which the supply of credit-money is endogenous. Nominal interest rate is determined by banks as a markup over the base rate, which is set by the monetary authority. Over time, banking markup varies with firms' profit rate on physical capital, while the base rate rises with any excess demand when capacity is fully utilized. The behavior of the economy is analyzed for the cases in which demand is or is not enough to ensure full capacity utilization.
TL;DR: In this article, the authors analyzed Brazilian socio-economic inequalities in health through the measurement of concentration indices for the variable self-assessed health status and found that health inequalities favour the richer.
Abstract: This paper analyses Brazilian socio-economic inequalities in health through the measurement of concentration indices for the variable self-assessed health status. Data used were taken from the 1996/97 Living Standard Measurement Study (LSMS). In summary, as far as socio-economic status variable distinction is concerned, it should be stressed that the degree of inequalities found when stratification was based on household total income per equivalent adult was slightly higher than that found when stratification was based on household total consumption expenditure per equivalent adult. The differences cited were shown statistically significant. With reference to the construction of equivalence scales for each household, one generally finds that the results are robust in relation to the different values used. The indices found for self-assessed health status reveal that health inequalities favour the richer.
TL;DR: The authors analyzes as oportunidades de trabalho e os niveis de remuneracao oferecidos a trabalhadores brancos e negros em a Companhia Cervejaria Brahma.
Abstract: Este artigo analisa as oportunidades de trabalho e os niveis de remuneracao oferecidos a trabalhadores brancos e negros em uma grande industria carioca: a Companhia Cervejaria Brahma. Trata-se de um estudo de caso que busca respostas para um conjunto de questoes sobre a absorcao da mao-de-obra negra e imigrante no mercado de trabalho da industria do antigo Distrito Federal. Com esse fio ordenador, o artigo esta estruturado da seguinte forma: em primeiro lugar, sao arroladas questoes recorrentes na historiografia brasileira acerca do mercado de trabalho industrial e da imigracao estrangeira na Primeira Republica; em segundo lugar, faz-se uma breve sintese da trajetoria da cervejaria Brahma, desde a sua fundacao ate os anos 1930; em terceiro, a metodologia de tratamento dos arquivos da empresa e explicitada para entao, em quarto lugar, elaborar-se uma analise do perfil de seus trabalhadores, empregando-se os indicadores de nacionalidade, de cor da pele, de instrucao, de tipo de ocupacoes e de rendimentos. Finalmente, analisaram-se esses indicadores com o proposito de identificar possiveis discriminacoes de raca ou nacionalidade dos trabalhadores. Um resultado inesperado foi a existencia de discriminacao contra brasileiros, mas nao contra afro-descendentes in se.
TL;DR: In this article, the finite-sample behavior of heteroskedasti covariance matrix estimators and associated quasi-t tests is analyzed using Monte Carlo methods, and a new estimator, called HC4, tailored to take into account the effect of leverage points in the design matrix on associated quasi t tests is proposed.
Abstract: This paper focuses on the finite-sample behavior of heteroskedasti city-consistent covariance matrix estimators and associated quasi-t tests. The estimator most commonly used is that proposed by Halbert White. Its finite-sample behavior under both homoskedasticity and heteroskedasticity is analyzed using Monte Carlo methods. The paper considers two other consistent estimators, namely: the HC3 estimator, which is an approximation to the jackknife estimator, and the weighted bootstrap estimator. Additionally, it evaluates the finite-sample behavior of two bootstrap quasi-t tests: the test based on a single bootstrapping scheme and the test based on a double, nested bootstrapping scheme. The latter is very computer-intensive, but proves to work well in small samples. Finally, the paper proposes a new estimator, called HC4, tailored to take into account the effect of leverage points in the design matrix on associated quasi-t tests.
TL;DR: In the late 60s, Mario Henrique Simonsen arrived at a view of inflation which he called "Model of Inflationary Feedback". This view included, under different names, certain notions that became popular in the 80s, such as inflationary shock, self-perpetuating inflation, and inflation institutionalized through indexation as discussed by the authors.
Abstract: In the late 60s, Mario Henrique Simonsen arrived at a view of inflation which he called 'Model of Inflationary Feedback'. This view included, under different names, certain notions that became popular in the 80s, such as inflationary shock, self-perpetuating inflation, and inflation institutionalized through indexation. Among eminent Brazilian economists, Simonsen was the first to defend the thesis that indexation hampers the effectiveness of the fight against inflation. From the early 70s on, he preached this thesis in his classes, his books, articles and speeches as a finance minister, stressing that, due to indexation, price rises in the past determined inflation in the present.
TL;DR: In this article, the authors analyzed the profitability of information sharing among Cournot oligopolists receiving private information about random demand and showed that if the private signal observed by firms is accurate enough, information exchange is profitable.
Abstract: In this paper we analyze the profitability of information sharing among Cournot oligopolists receiving private information about random demand. We model the random demand as a linear demand having, 1) an unknown intercept, and 2) an unknown slope. In each of these two scenarios, firms observe private signals about the unknown parameter. We show that in the scenario-1, if the private signal observed by firms is accurate enough, information exchange is profitable and in the scenario-2, if there is a sufficiently large variation in the demand slope and private signals are accurate enough, firms earn strictly higher profits by sharing their information rather than keeping it private.
TL;DR: In this paper, the authors studied the incentives for fiscal discipline faced by local governments (states) in a federalist system where revenue-sharing transfers are important sources of income for the states and showed that the central government can use the transfers as a powerful mechanism to induce the states into choosing lower levels of fiscal deficits.
Abstract: This article studies the incentives for fiscal discipline faced by local governments (states) in a federalist system where revenue-sharing transfers are important sources of income for the states. Based on a market-discipline type of model of state-expenditure policy, it shows that the central government can use the transfers as a powerful mechanism to induce the states into choosing lower levels of fiscal deficits. This is accomplished by making the transfers contingent on an optimally chosen 'deficit targeting' rule, in such a way that the farther the state realized deficit from the targeted level, the lower the transfers from the central government. State debt-renegotiation process is shown to be a good opportunity for implementing such a rule by using an individually rational, incentive compatible contract between the states and the federal government.
TL;DR: In this paper, a seller's incentives to invest in a costly advertising campaign to report past-sales were analyzed in a market where past sales embody information about consumers' tastes, and the seller benefits from the consumers' herding behavior brought about by the advertising campaign.
Abstract: In a market where past-sales embody information about consumers' tastes, we analyze a seller's incentives to invest in a costly advertising campaign to report past-sales. If consumers are poorly informed, a pooling equilibrium with past-sales advertising obtains. Information revelation only occurs when the seller benefits from the consumers' herding behavior brought about by the advertising campaign. If consumers are better informed, a separating equilibrium with past-sales advertising arises. Information revelation always happens, either through prices or through costly advertisements.