%CC_VARIABLES.M
function [rL, rH, laH, laL, hL, hH, yL, yH, cL, cH, apL, apH, bettaL, bettaH] = cc_variables(laL_o_rL, laH_o_rH,a, DL, DH);
%[rL, rH, laH, laL, hL, hH, yL, yH, cL, cH, apL, apH, bettaL, bettaH] = cc_variables(laL_o_rL, laH_o_rH,a, DL, DH); Given the stock of debt and the ratios laL/rL and laH/rH, this program returns hours, output, the marginal utility of wealth, consumption, next-period debt, and an indicator variable, ccv, indicating the states in which the collateral constraint binds. The subscripts L and H refer to low and high states of technology. 
 

%Deep parameters and steady-state values
[RSTAR, SIG, OMEGA, BETTA1, ALFA, MU, z, PAIZ, KAPA, Kss,  QQss, Css, Hss, LAss, Ass, Yss, BETTAss] = cc_ss;

zL = z(1);
zH = z(2);

m = length(laL_o_rL);

rL = ones(m,1)*RSTAR;
rH = ones(m,1)*RSTAR;

laL = laL_o_rL.*rL;
laH = laH_o_rH .*rH;

hL = ( (1-ALFA) * exp(zL) * Kss^(ALFA) ) .^(1/(OMEGA+ALFA-1));
hH = ( (1-ALFA) * exp(zH) * Kss^(ALFA) ) .^(1/(OMEGA+ALFA-1));

yL = exp(zL) * Kss^ALFA * hL.^(1-ALFA);
yH = exp(zH) * Kss^ALFA * hH.^(1-ALFA);

cL = laL.^(-1/SIG) + hL^OMEGA/OMEGA;
cH = laH.^(-1/SIG) + hH^OMEGA/OMEGA;

apL = RSTAR .* (a + cL - yL);
apH = RSTAR .* (a + cH - yH);


ccvL = find(apL>DH);
ccvH = find(apH>DH);


apL = max(apL,DL);
apH = max(apH,DL);
apL = min(apL,DH);
apH = min(apH,DH);

cL = apL./RSTAR-a+yL;
cH = apH./RSTAR-a+yH;

bettaL = (1+cL-hL.^OMEGA/OMEGA).^(-BETTA1);
bettaH = (1+cH-hH.^OMEGA/OMEGA).^(-BETTA1);

laL = (cL-hL.^OMEGA/OMEGA).^(-SIG);
laH = (cH-hH.^OMEGA/OMEGA).^(-SIG);

rL(ccvL) = laL(ccvL) ./ laL_o_rL(ccvL);
rH(ccvH) = laH(ccvH) ./ laH_o_rH(ccvH);