function y = F(FVAL)

siggma=2;
alppha=0.32;
varrphi=3;
delt_k=0.025;
betta=0.99;
epsl=6;
gam=0.4;
etta=1;
rstar = 0.04/4;       
pbar = 0.07/4;        
nuy = 0.09;    
delt_b = 0.059;
varrpsi=0.000742;  
muy_b = 0.02;         


r_ib   = betta^(-1)-1;
R_b    = r_ib;
r_b    = R_b+muy_b;
r      = rstar+pbar;
d      = (r_ib-(rstar+pbar))/varrpsi;
a      = 1;
pstar  = 1;
e      = 1;
p_fo   = (epsl/(epsl-1))*e*pstar;
p_f    = p_fo;
p_h    = p_f;
p_ho   = p_h;
pw     = p_ho*(epsl-1)/epsl;
p      = ((1-gam)*p_h^(1-etta)+gam*p_f^(1-etta))^(1/(1-etta));
ystar  = 1;


c = FVAL(1);
k = FVAL(2);


% {solve numerically for c, k}
y(1) = k*(1-alppha)*(r_b+delt_k)/alppha+r_ib*(k*(1-nuy)-d*e)+(p_h-pw)*((1-gam)*(p_h/p)^(-etta)*c+gam*(p_h/(e*pstar))^(-etta)*ystar)+(p_f-e*pstar)*gam*(p_f/p)^(-etta)*c-p*c;
y(2) = p*k^varrphi-(((r_b+delt_k)/(a*alppha*pw))^((varrphi+1)/(alppha-1))*(1-alppha)*(r_b+delt_k)*c^(-siggma)/alppha);


end



