Awareness and growth: information externalities in endogenous growth

This paper develops a general version of an endogenous growth model due to Barro. The focus is on the level of awareness of the private sector of the fiscal constraints that bind government policies. It is proved that, except in very special cases, optimal tax regimes are not constant and require detailed knowledge by government of technology, tastes and level of awareness; this casts doubts on the robustness of the model and its validity for policy recommendation.