diff --git a/tests/Makefile.am b/tests/Makefile.am
index f6f4d80ff4a5bd4aaee4e75e278aac38f7685869..2913461ca284728d38002e92bee7442d70423a14 100644
--- a/tests/Makefile.am
+++ b/tests/Makefile.am
@@ -268,6 +268,7 @@ MODFILES = \
 	identification/correlated_errors/fs2000_corr.mod \
 	identification/forward_looking/forward_looking_empty_ghx.mod \
 	identification/forward_looking/forward_looking_varobs_x.mod \
+	model_diagnostics/example2_block_model_diag.mod	\
 	simul/example1.mod \
 	simul/ramst_vec.mod \
 	simul/Solow_no_varexo.mod \
diff --git a/tests/model_diagnostics/example2_block_model_diag.mod b/tests/model_diagnostics/example2_block_model_diag.mod
new file mode 100644
index 0000000000000000000000000000000000000000..dcee082e1a018324fae8a101cd24257a43aa139c
--- /dev/null
+++ b/tests/model_diagnostics/example2_block_model_diag.mod
@@ -0,0 +1,63 @@
+//test singular Jacobian check with block decomposition
+
+/*
+ * Example 2 from F. Collard (2001): "Stochastic simulations with DYNARE:
+ * A practical guide" (see "guide.pdf" in the documentation directory).
+ */
+
+/*
+ * Copyright (C) 2001-2010 Dynare Team
+ *
+ * This file is part of Dynare.
+ *
+ * Dynare is free software: you can redistribute it and/or modify
+ * it under the terms of the GNU General Public License as published by
+ * the Free Software Foundation, either version 3 of the License, or
+ * (at your option) any later version.
+ *
+ * Dynare is distributed in the hope that it will be useful,
+ * but WITHOUT ANY WARRANTY; without even the implied warranty of
+ * MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+ * GNU General Public License for more details.
+ *
+ * You should have received a copy of the GNU General Public License
+ * along with Dynare.  If not, see <https://www.gnu.org/licenses/>.
+ */
+
+
+var y, c, k, a, h, b;
+varexo e, u;
+
+parameters beta, rho, alpha, delta, theta, psi, tau;
+
+alpha = 0.36;
+rho   = 1;
+tau   = 0;
+beta  = 0.99;
+delta = 0.025;
+psi   = 0;
+theta = 2.95;
+
+model(block);
+exp(c)*theta*exp(h)^(1+psi)=(1-alpha)*exp(y);
+exp(k) = beta*(((exp(b)*exp(c))/(exp(b(+1))*exp(c(+1))))
+         *(exp(b(+1))*alpha*exp(y(+1))+(1-delta)*exp(k)));
+exp(y) = exp(a)*(exp(k(-1))^alpha)*(exp(h)^(1-alpha));
+exp(k) = exp(b)*(exp(y)-exp(c))+(1-delta)*exp(k(-1));
+a = rho*a(-1)+tau*b(-1) + e;
+b = tau*a(-1)+rho*b(-1) + u;
+end;
+
+initval;
+y = 0.1;
+c = -0.2;
+h = -1.2;
+k =  2.4;
+a = 0;
+b = 0;
+e = 0;
+u = 0;
+end;
+
+steady;
+model_diagnostics;
\ No newline at end of file