%SP_SS.M
function [ THETA,GBAR,SIGMA,CHI,GAMA,BETTA,DELTA,ALFA,ETA,CSTAR,IVSTAR,GSTAR,RHOZ,RHOG,RHOV,w,h,c,u,k,iv,mu,a,g,v,output,wp,hp,cp,up,kp,ivp,mup,ap,gp,vp,outputp,W,H,C,U,K,IV,MU,A,G,V,OUTPUT,PHI,EHW,SC,SG,SI,THETA_C,THETA_G,THETA_I]=sp_ss(theta_c,theta_g,theta_i);
%This program produces the deep structural parameters and computes the steady state of the model described in  ``Deep Habits.'' by Morten Ravn, Stephanie Schmitt-Grohe, and Martin Uribe 
%(c) Stephanie Schmitt-Grohe and Martin Uribe, December 23, 2003


%Calibrated parameters


if nargin<3
theta_i = 0; %investment subsistence point
end

if nargin<2
theta_g = 0.275; %gov't subsistence point
end

if nargin<1
theta_c = 0.275; %consumption subsistence point
end

THETA_C=theta_c;%ratio of subsistence-consumption-to-consumption 


THETA_G=theta_g;%ratio of subsistence-gov'tconsumption-to-gov'tconsumption 



THETA_I=theta_i;%ratio of subsistence-investment-to-investment 
SIGMA = 2; %intertemporal elasticity of substitution

EHW = 1.3; %Frisch elasticity of labor suppy

H = 0.2; %hours (Prescott, 1986)

ETA = 5.3%Long-run Price elasticity of demand for a particular variety. Taken from the econometric estimates shown in the paper ``Deep Habits''

R = 1.04^(1/4); %Gross quarterly real interest rate (Rotemberg & Woodford, JPE, 1991)

SH = 0.75;%Labor share (Rotemberg & Woodford, JPE, 1991)

SG = 0.12; % Steady State Share of Government Purchases (Rotemberg & Woodford, JPE, 1991)

RHOZ = 0.9; %Persistence of technology shock z_t

RHOG = 0.9; %Persistence of Government purchases shock

RHOV = 0.9; %Persistence of preference shock

SC = 0.7; %Consumption share (Rotemberg & Woodford, JPE, 1991)
 
%Implied parameters

BETTA = 1/R; %Subjective discount factor

SI = 1-SC-SG; %INVESTMENT SHARE

THETA = SC * THETA_C + SG * THETA_G + SI * THETA_I; %Average ratio of subsistence absorption to absorption 

MU = 1 / (1-1/ETA/ (1-THETA)); %Markup

ALFA = 1 - SH; %capital elasticity of output

SK = SH * ALFA/(1-ALFA); %share of capital

ans = SI  / SH * (1-ALFA) / ALFA  * (1-THETA_I);
DELTA =  ans*(1/BETTA-1)/(1-ans); %Depreciation rate

U = 1/BETTA-1+DELTA; %rental rate of capital

K = (SI/DELTA/MU*(1-THETA_I))^(1/(1-ALFA))*H; %Steady state capital stock

OUTPUT = K^ALFA * H^(1-ALFA) / MU; %output

W = U * (1-ALFA)/ALFA *K/H; %Wage rate

IV = DELTA * K / (1-THETA_I); %Investment

PHI = K^ALFA * H^(1-ALFA) - OUTPUT; %Fixed cost

C = SC * OUTPUT; %consumption

CHI = (1-H)/H / EHW;
GAMA = W * (1-H)^CHI / (C*(1-THETA_C))^SIGMA; 

V =1; %Steady-State value of preference shock

A = 1; %steady-state value of technology shock

G = SG * OUTPUT; %Government consumption

GBAR=G; %Unconditional mean of gov't consumption

%Subsistence levels of consumption, gov't spending, and investment
CSTAR = THETA_C*C;
IVSTAR = THETA_I*IV;
GSTAR = THETA_G*G;

%Log values
w=log(W);
h=log(H);
c=log(C);
u=log(U);
k=log(K);
iv=log(IV);
mu=log(MU);
a=log(A);
g = log(G);
output = log(OUTPUT);
v=log(V);
%Future values of logged variables
wp=log(W);
hp=log(H);
cp=log(C);
up=log(U);
kp=log(K);
ivp=log(IV);
mup=log(MU);
ap=log(A);
gp = log(G);
outputp = log(OUTPUT);
vp=log(V);