%CCRC_VARIABLES.M
function [rL, rH, laH, laL, hL, hH, yL, yH, cL, cH, apL, apH, bettaL, bettaH] = ccrc_variables(rcL, rcH,a, DL, DH);
%[rL, rH, laH, laL, hL, hH, yL, yH, cL, cH, apL, apH, bettaL, bettaH] = ccrc_variables(rcL, rcH,a, DL, DH); Given the stock of debt and the ratios rL*cL and rH*cH, this program returns the equilibrium values of  hours worked (hL and hH), output (yL and yH), the marginal utility of wealth (laL and laH), consumption (cL and cH), and next-period debt (apL and apH), and an indicator variable (ccvL and ccvH) indicating the states in which the collateral constraint binds. The subscripts L and H refer to low and high (or 1 and 2) 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] = ccrc_ss;

%Two possible states of technology
zL = z(1);
zH = z(2);

m = length(rcL);

%Interest rate under the conjecture of debt limit not binding
rL = ones(m,1)*RSTAR;
rH = ones(m,1)*RSTAR;

%Consumption
cL = rcL./rL;
cH = rcH ./rH;

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

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

%Next period's debt
apL = RSTAR .* (a + cL - yL);
apH = RSTAR .* (a + cH - yH);

%Indicate periods in which the debt limit is binding
ccvL = find(apL>DH);
ccvH = find(apH>DH);

%Impose limits on debt
apL = max(apL,DL);
apL = min(apL,DH);
apH = max(apH,DL);
apH = min(apH,DH);

%adjust interest rate
rL(ccvL) = (apL(ccvL)-rcL(ccvL)) ./ (a(ccvL)-yL);
rH(ccvH) = (apH(ccvH)-rcH(ccvH)) ./ (a(ccvH)-yH);

%adjust consumption
cL = apL./rL - a+yL;
cH = apH./rH - a+yH;

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

%Marginal utility of consumption
laL = (cL-hL.^OMEGA/OMEGA).^(-SIG);

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