%NEOCLASSICAL_MODEL_SS.M
function [GAM,DELTA,ALFA,BETTA,RHO,eta,c,cp,k,kp,a,ap,e,ep,SIG_A,SIG_K]=neoclassical_model_ss
%This program produces the the deep structural parameters and computes the steady state of the simple neoclassical growth model described in section 2.1 of ``Solving Dynamic General Equilibrium Models Using a Second-Order Approximation to the Policy Function,'' by Stephanie Schmitt-Grohe and Martin Uribe, (2001). 
%
%(c) Stephanie Schmitt-Grohe and Martin Uribe
%Date July 17, 2001, revised 22-Oct-2004

DELTA=0.1; %depreciation rate
ALFA=0.33; %capital share
RHO=0.4; %persistence of technology shock
GAM=4; %intertemporal elasticity of substitution
SIG_K=0.05; %std of depreciation shock
SIG_A=0.02; %std of TFP shock
eta=[0 SIG_K 0; 0 0 SIG_A]'; %Matrix defining driving force
ct_disc=-0.5*ALFA*GAM*(1-ALFA*GAM)*SIG_K^2-(1-ALFA*GAM)*DELTA;
BETTA = 1/(1+ct_disc);

a = 1; %steady-state value of technology shock 
k = ((1/BETTA+DELTA-1)/ALFA)^(1/(ALFA-1)); %steady-state value of capital
c = a * k^(ALFA)-DELTA*k; %steady-state value of consumption 
%a = log(A); 
%k = log(K);
%c = log(C);
ap=a;
kp=k;
cp = c;
e=0;
ep=e;