This paper develops a small-scale macro-econometric model for Greece. The model will be used in order to examine the impact of macroeconomic policies on the real sector of the economy during the very difficult adjustment period that the Greek economy is currently facing. The model combines...

Rational expectations has been the dominant way to model expectations, but the literature has quickly moved to a more realistic assumption of boundedly rational learning where agents are assumed to use only a limited set of information to form their expectations. A standard assumption is that...