function [nfx, nfy, nfxp, nfyp, nvarshock, nETASHOCK,tby] = financial_friction_ss(param_estim);
%[nfx, nfy, nfxp, nfyp, nvarshock, nETASHOCK,tby] = financial_friction_ss(param_estim) introduces calibrated parameters, computes the steady state, and evaluates the first derivatives of the equilibrium conditions of the DSGE model with financial frictions presented in ``Real Business Cycles in emerging Countries?,'' by J. Garcia-Cicco, R. Pancrazi, and M. Uribe (AER forthcoming).
%
%Calls: financial_friction_num_eval. This  file is produced by running financial_friction.m
%
%(c)Martin Uribe
%
%Date September 2009

G = param_estim(1);
SIGMAG = param_estim(2);
RHOG = param_estim(3);
SIGMAA = param_estim(4);
RHOA = param_estim(5);
SIGMANU = param_estim(6);
RHONU = param_estim(7);
SIGMAS = param_estim(8);
RHOS = param_estim(9);
SIGMAMU = param_estim(10);
RHOMU = param_estim(11);
PHI = param_estim(12);
PSSI = param_estim(13);
STDmey = param_estim(14);
STDmec = param_estim(15);
STDmeiv = param_estim(16);
STDmetby = param_estim(17);


GAMA = 2; %intertemporal elasticity of substitution

DBAR = 0.007;

DELTA = 1.03^4-1;%0.03; %Depreciation rate

ALFA = 0.32; %Capital elasticity of the production function

%PSSI = 0.001;%parameter governing the debt elasticity of the interest rate. 

OMEGA = 1.6; %exponent of labor in utility function

THETA = 1.4 * OMEGA;

BETTA = 0.98^4;%0.98;%discount factor

SHARE_S = 0.10; %Share of public spending in GDP

RSTAR = 1/BETTA * G^GAMA; %World interest rate

r=RSTAR;  %Country interest rate

d =  DBAR; %foreign debt

k_over_gh = 	((G^GAMA/BETTA - 1 + DELTA) / ALFA)^(1/(ALFA-1)); %K/(G*H)

h = ((1-ALFA)* G * k_over_gh^ALFA / THETA)^(1/(OMEGA-1)); %hours

k = k_over_gh * G * h; %capital


ivv = (G-1+DELTA) * k; %investment

yy = k^ALFA * (h*G)^(1-ALFA); %output

s = yy *SHARE_S;

S = s;

c = (G/r-1) * d + yy - s - ivv; %Consumption

tb = yy - c - s - ivv; %Trade balance

tby = tb / yy;

la = (c - THETA/OMEGA*h^OMEGA)^(-GAMA); %marginal utility of wealth

k1 = k; %Auxiliary variable

a = 1; %productivity shock 

g = G; %Growth rate of nonstationary productivity shock

gc = g;
giv = g;
yyback = yy;
cback = c;
ivvback = ivv;
gback = g;
gy = g;

nu = 1;
mu = 1;

financial_friction_num_eval; %The file financial_friction_num_eval.m is produced by running financial_friction.m
 

nvarshock = nETASHOCK*nETASHOCK';