The focus of this paper is to examine the asset pricing implications of a real business cycle model with recursive preferences and an investment specific technology shock. Particularly, in this model, the relative price of capital is subject to a shock and thereby it first increases the...

In this paper, I build a Dynamic Stochastic General Equilibrium (DSGE) model and estimate it using Bayesian Markov Chain Monte Carlo (MCMC) methods. I use the results in order to examine how asset prices and macroeconomic quantities respond to the di erent shocks in the economy. Fluctuations in...