Investment-specific technology shocks play a big role in the ups and downs of the economy. These shocks are linked to problems in financial markets, which help turn goods into capital. But when firms have trouble getting loans because of collateral constraints, these investment shocks become less important. Instead, changes in risk premiums become the main drivers of the economy's ups and downs. So, when building models to understand the economy, it's important to consider how constraints on collateral can change the impact of different shocks.