This paper designs and implements a Bayesian dynamic latent factor model for a vector of data describing the Iowa economy.

We develop a business cycle model in which consumption goods, physical capital and human capital are produced in separate sectors.

Is the risk aversion parameter in the simple intertemporal consumption CAPM "small" as in Hansen and Singleton (1982,1983), or is it that its reciprocal, the intertemporal elasticity of substitution, is small, as in Hall (1988)? This paper attributes the disparate estimates of this fundamental...