diff --git a/doc/manual/source/the-model-file.rst b/doc/manual/source/the-model-file.rst
index 5cb0378e2cc0d2909201f412af6c1e7e6988e63c..95b2073c61cdce9b3de9247502e6afdb022774c3 100644
--- a/doc/manual/source/the-model-file.rst
+++ b/doc/manual/source/the-model-file.rst
@@ -110,7 +110,7 @@ While Dynare allows the user to choose their own variable names, there
are some restrictions to be kept in mind. First, variables and
parameters must not have the same name as Dynare commands or built-in
functions. In this respect, Dynare is not case-sensitive. For example,
-do not use ``Ln`` or ``Sigma_e`` to name your variable. Not conforming
+do not use ``Ln`` or ``shocks`` to name your variable. Not conforming
to this rule might yield hard-to-debug error messages or
crashes. Second, when employing user-defined steady state files it is
recommended to avoid using the name of MATLAB functions as this may cause
@@ -2536,8 +2536,7 @@ in each period. In Dynare, these random values follow a normal
distribution with zero mean, but it belongs to the user to specify the
variability of these shocks. The non-zero elements of the matrix of
variance-covariance of the shocks can be entered with the ``shocks``
-command. Or, the entire matrix can be directly entered with
-``Sigma_e`` (this use is however deprecated).
+command.
If the variance of an exogenous variable is set to zero, this variable
will appear in the report on policy and transition functions, but
@@ -2799,34 +2798,6 @@ blocks.
end;
-.. specvar:: Sigma_e
-
- |br| This special variable specifies directly the covariance
- matrix of the stochastic shocks, as an upper (or lower) triangular
- matrix. Dynare builds the corresponding symmetric matrix. Each row
- of the triangular matrix, except the last one, must be terminated
- by a semi-colon ;. For a given element, an arbitrary *EXPRESSION*
- is allowed (instead of a simple constant), but in that case you
- need to enclose the expression in parentheses. The order of the
- covariances in the matrix is the same as the one used in the
- ``varexo`` declaration.
-
- *Example*
-
- ::
-
- varexo u, e;
-
- Sigma_e = [ 0.81 (phi*0.9*0.009);
- 0.000081];
-
- This sets the variance of ``u`` to 0.81, the variance of ``e`` to
- 0.000081, and the correlation between ``e`` and ``u`` to ``phi``.
-
- .. warning:: **The use of this special variable is deprecated and
- is strongly discouraged**. You should use a
- ``shocks`` block instead.
-
.. matcomm:: get_shock_stderr_by_name ('EXOGENOUS_NAME');
|br| Given the name of an exogenous variable, returns its standard
diff --git a/preprocessor b/preprocessor
index a7b0a324c9b97ec1bbcf3e3487dcaa176423598a..8ebd9a9496ecf4a1694e40cde36beaab165c20f0 160000
--- a/preprocessor
+++ b/preprocessor
@@ -1 +1 @@
-Subproject commit a7b0a324c9b97ec1bbcf3e3487dcaa176423598a
+Subproject commit 8ebd9a9496ecf4a1694e40cde36beaab165c20f0
diff --git a/tests/ecb/SUR/panel_var_diff_NB_simulation_test.mod b/tests/ecb/SUR/panel_var_diff_NB_simulation_test.mod
index ce265aa47b7325b107b693566523de250ea5c375..d4a62d824293aaa734244fda38b044e0a381ec68 100644
--- a/tests/ecb/SUR/panel_var_diff_NB_simulation_test.mod
+++ b/tests/ecb/SUR/panel_var_diff_NB_simulation_test.mod
@@ -152,9 +152,7 @@ NSIMS = 1;
options_.noprint = 1;
calibrated_values = M_.params;
-verbatim;
Sigma_e = M_.Sigma_e;
-end;
options_.bnlms.set_dynare_seed_to_default = false;
nparampool = length(M_.params);
diff --git a/tests/ecb/SUR/panel_var_diff_NB_simulation_zero_eq.mod b/tests/ecb/SUR/panel_var_diff_NB_simulation_zero_eq.mod
index e58cec26196afc917cbf36d95ec49ce240536a26..e1351558be62e6b0b954e749e1c9a22fe1f4df8d 100644
--- a/tests/ecb/SUR/panel_var_diff_NB_simulation_zero_eq.mod
+++ b/tests/ecb/SUR/panel_var_diff_NB_simulation_zero_eq.mod
@@ -148,9 +148,7 @@ NSIMS = 1;
options_.noprint = 1;
calibrated_values = M_.params;
-verbatim;
Sigma_e = M_.Sigma_e;
-end;
options_.bnlms.set_dynare_seed_to_default = false;
nparampool = length(M_.params);
diff --git a/tests/ecb/SUR/sur_noniterative.mod b/tests/ecb/SUR/sur_noniterative.mod
index 6bee2aa794a63ba35a6dcf9c5449a9d33dec8829..fda4ceeff5dc304d1a3d358d0701630ebdb8c337 100644
--- a/tests/ecb/SUR/sur_noniterative.mod
+++ b/tests/ecb/SUR/sur_noniterative.mod
@@ -152,9 +152,7 @@ NSIMS = 1;
options_.noprint = 1;
calibrated_values = M_.params;
-verbatim;
Sigma_e = M_.Sigma_e;
-end;
options_.bnlms.set_dynare_seed_to_default = false;
nparampool = length(M_.params);
diff --git a/tests/ecb/SUR/sur_params_noniterative.mod b/tests/ecb/SUR/sur_params_noniterative.mod
index c85ffe2e8571db4a3a9f5793538b0f2a2ebc8c19..4cdfc7d737c4dbbdc35f4cd1ed9ed3b77bf0acdf 100644
--- a/tests/ecb/SUR/sur_params_noniterative.mod
+++ b/tests/ecb/SUR/sur_params_noniterative.mod
@@ -152,9 +152,7 @@ NSIMS = 1;
options_.noprint = 1;
calibrated_values = M_.params;
-verbatim;
Sigma_e = M_.Sigma_e;
-end;
options_.bnlms.set_dynare_seed_to_default = false;
nparampool = length(M_.params);
diff --git a/tests/ecb/pooled_fgls/panel_var_diff_NB_simulation_test.mod b/tests/ecb/pooled_fgls/panel_var_diff_NB_simulation_test.mod
index 171f4dc5392f5fd9083d6a6d9951afa8afc02eee..5836567865b8c56c900abaf24aaf4788161bfdb6 100644
--- a/tests/ecb/pooled_fgls/panel_var_diff_NB_simulation_test.mod
+++ b/tests/ecb/pooled_fgls/panel_var_diff_NB_simulation_test.mod
@@ -152,9 +152,7 @@ end;
NSIMS = 1;
calibrated_values = M_.params;
-verbatim;
Sigma_e = M_.Sigma_e;
-end;
options_.bnlms.set_dynare_seed_to_default = false;
diff --git a/tests/ecb/pooled_fgls/test_param_names.mod b/tests/ecb/pooled_fgls/test_param_names.mod
index d6793407b44bb46f2f127947631de9b0a3417db5..63f32fb7c403f28cceea97a097b54fe85db83d8f 100644
--- a/tests/ecb/pooled_fgls/test_param_names.mod
+++ b/tests/ecb/pooled_fgls/test_param_names.mod
@@ -152,9 +152,7 @@ end;
NSIMS = 1;
calibrated_values = M_.params;
-verbatim;
Sigma_e = M_.Sigma_e;
-end;
options_.bnlms.set_dynare_seed_to_default = false;
diff --git a/tests/ecb/pooled_ols/panel_var_diff_NB_simulation_test.mod b/tests/ecb/pooled_ols/panel_var_diff_NB_simulation_test.mod
index 812b7dddfcc44f4300987dade1cfdd9392f24ffa..8fbfdb8f9b9cefe5fce58ce577408ea3fcd366a8 100644
--- a/tests/ecb/pooled_ols/panel_var_diff_NB_simulation_test.mod
+++ b/tests/ecb/pooled_ols/panel_var_diff_NB_simulation_test.mod
@@ -152,9 +152,7 @@ end;
NSIMS = 1;
calibrated_values = M_.params;
-verbatim;
Sigma_e = M_.Sigma_e;
-end;
options_.bnlms.set_dynare_seed_to_default = false;
diff --git a/tests/ecb/pooled_ols/test_param_names.mod b/tests/ecb/pooled_ols/test_param_names.mod
index 510a485998c26f8da57ccf83e7b2e9f3b3b9211f..44acc67de99e24572c1e9e967c06f7c371f70660 100644
--- a/tests/ecb/pooled_ols/test_param_names.mod
+++ b/tests/ecb/pooled_ols/test_param_names.mod
@@ -152,9 +152,7 @@ end;
NSIMS = 1;
calibrated_values = M_.params;
-verbatim;
Sigma_e = M_.Sigma_e;
-end;
options_.bnlms.set_dynare_seed_to_default = false;
diff --git a/tests/t_lag2.mod b/tests/t_lag2.mod
deleted file mode 100644
index 72f1885adc0497657493e3b75e02a35cc12daa4a..0000000000000000000000000000000000000000
--- a/tests/t_lag2.mod
+++ /dev/null
@@ -1,40 +0,0 @@
-// example 1 from Collard's guide to Dynare
-var y, c, k, a, h, b;
-varexo e,u;
-
-parameters beta, rho, alpha, delta, theta, psi, tau, phi;
-
-alpha = 0.36;
-rho = 0.95;
-tau = 0.025;
-beta = 0.99;
-delta = 0.025;
-psi = 0;
-theta = 2.95;
-
-phi = 0.1;
-
-model;
-c*theta*h^(1+psi)=(1-alpha)*y;
-k = beta*(((exp(b)*c)/(exp(b(+1))*c(+1)))
- *(exp(b(+1))*alpha*y(+1)+(1-delta)*k));
-y = exp(a)*(k(-1)^alpha)*(h^(1-alpha));
-k = exp(b)*(y-c)+(1-delta)*k(-1);
-a = rho*a(-1)+tau*b(-2) + e;
-b = tau*a(-1)+rho*b(-2) + u;
-end;
-
-initval;
-y = 1.08068253095672;
-c = 0.80359242014163;
-h = 0.29175631001732;
-k = 5;
-a = 0;
-b = 0;
-e = 0;
-u = 0;
-end;
-
-Sigma_e = [ 0.000081; (phi*0.009*0.009) 0.000081];
-
-stoch_simul(order=2,irf=0,periods=50000);
diff --git a/tests/t_periods.mod b/tests/t_periods.mod
deleted file mode 100644
index 3bba4770cb4033f5789c9f99a316f284e91fb3cf..0000000000000000000000000000000000000000
--- a/tests/t_periods.mod
+++ /dev/null
@@ -1,44 +0,0 @@
-// example 1 from Collard's guide to Dynare
-// test options.periods
-
-var y, c, k, a, h, b;
-varexo e,u;
-
-parameters beta, rho, alpha, delta, theta, psi, tau, phi;
-
-alpha = 0.36;
-rho = 0.95;
-tau = 0.025;
-beta = 0.99;
-delta = 0.025;
-psi = 0;
-theta = 2.95;
-
-phi = 0.1;
-
-model;
-c*theta*h^(1+psi)=(1-alpha)*y;
-k = beta*(((exp(b)*c)/(exp(b(+1))*c(+1)))
- *(exp(b(+1))*alpha*y(+1)+(1-delta)*k));
-y = exp(a)*(k(-1)^alpha)*(h^(1-alpha));
-k = exp(b)*(y-c)+(1-delta)*k(-1);
-a = rho*a(-1)+tau*b(-2) + e;
-b = tau*a(-1)+rho*b(-2) + u;
-end;
-
-initval;
-y = 1.08068253095672;
-c = 0.80359242014163;
-h = 0.29175631001732;
-k = 5;
-a = 0;
-b = 0;
-e = 0;
-u = 0;
-end;
-
-Sigma_e = [ 0.000081; (phi*0.009*0.009) 0.000081];
-
-check;
-
-stoch_simul(order=2,irf=0,periods=400);