diff --git a/preprocessor b/preprocessor
index 4560639eb4035448cc8adc4535a1957fa82924ab..740ea833f6b4a93c260b32e62f4302483af54f7a 160000
--- a/preprocessor
+++ b/preprocessor
@@ -1 +1 @@
-Subproject commit 4560639eb4035448cc8adc4535a1957fa82924ab
+Subproject commit 740ea833f6b4a93c260b32e62f4302483af54f7a
diff --git a/tests/Makefile.am b/tests/Makefile.am
index 88302799d47117c221df3fed009779808e20f563..3641f52791495cc6138358335eb4fc33de2ca78d 100644
--- a/tests/Makefile.am
+++ b/tests/Makefile.am
@@ -315,6 +315,10 @@ MODFILES = \
deterministic_simulations/multiple_lead_lags/sim_lead_lag_aux_vars.mod \
deterministic_simulations/multiple_lead_lags/sim_lead_lag.mod \
deterministic_simulations/lola_solve_one_boundary.mod \
+ deterministic_simulations/lola_solve_one_boundary_mfs1.mod \
+ deterministic_simulations/lola_solve_one_boundary_mfs2.mod \
+ deterministic_simulations/lola_solve_one_boundary_mfs3.mod \
+ deterministic_simulations/ramst_block_mfs1.mod
deterministic_simulations/linear_approximation/sw.mod \
deterministic_simulations/multiple_lead_lags/AR2.mod \
deterministic_simulations/multiple_lead_lags/AR2_forward.mod \
@@ -531,6 +535,13 @@ deterministic_simulations/rbc_det_stack_solve_algo_7_exo_lead.m.trs: determinist
deterministic_simulations/rbc_det_stack_solve_algo_7_exo_lead.o.trs: deterministic_simulations/rbc_det.o.trs
deterministic_simulations/rbc_det_stack_solve_algo_7_exo_lag.m.trs: deterministic_simulations/rbc_det.m.trs
deterministic_simulations/rbc_det_stack_solve_algo_7_exo_lag.o.trs: deterministic_simulations/rbc_det.o.trs
+deterministic_simulations/lola_solve_one_boundary_mfs1.m.trs: deterministic_simulations/lola_solve_one_boundary.m.trs
+deterministic_simulations/lola_solve_one_boundary_mfs1.o.trs: deterministic_simulations/lola_solve_one_boundary.o.trs
+deterministic_simulations/lola_solve_one_boundary_mfs2.m.trs: deterministic_simulations/lola_solve_one_boundary.m.trs
+deterministic_simulations/lola_solve_one_boundary_mfs2.o.trs: deterministic_simulations/lola_solve_one_boundary.o.trs
+deterministic_simulations/lola_solve_one_boundary_mfs3.m.trs: deterministic_simulations/lola_solve_one_boundary.m.trs
+deterministic_simulations/lola_solve_one_boundary_mfs3.o.trs: deterministic_simulations/lola_solve_one_boundary.o.trs
+
histval_initval_file/ramst_initval_file.m.trs: histval_initval_file/ramst_initval_file_data.m.tls histval_initval_file/ramst_data.m.trs
histval_initval_file/ramst_initval_file.o.trs: histval_initval_file/ramst_initval_file_data.o.tls histval_initval_file/ramst_data.o.trs
diff --git a/tests/deterministic_simulations/lola_solve_one_boundary.mod b/tests/deterministic_simulations/lola_solve_one_boundary.mod
index a293647fcd4fcfa26d219caef9887cfa1042585b..6930b4d7240974198371bffd9a3a762c02e2c171 100644
--- a/tests/deterministic_simulations/lola_solve_one_boundary.mod
+++ b/tests/deterministic_simulations/lola_solve_one_boundary.mod
@@ -972,7 +972,8 @@ end;
% Numerical Simulation, Control Parameters
% *******************************************
-simul(periods=125,maxit=100);
+perfect_foresight_setup(periods=125);
+perfect_foresight_solver(maxit=100);
if ~oo_.deterministic_simulation.status
error('Perfect foresight simulation failed')
diff --git a/tests/deterministic_simulations/lola_solve_one_boundary_mfs1.mod b/tests/deterministic_simulations/lola_solve_one_boundary_mfs1.mod
new file mode 100644
index 0000000000000000000000000000000000000000..2554539c56a44748aabdb6b94f8164f9e9a0c8c7
--- /dev/null
+++ b/tests/deterministic_simulations/lola_solve_one_boundary_mfs1.mod
@@ -0,0 +1,987 @@
+// Tests option mfs=1 with block
+
+load lola_data.mat
+
+% ====================================================
+% declarations var -- varexo -- para
+% ====================================================
+
+@#define nbr_work_generations=9
+@#define nbr_early_generations=2
+@#define nbr_generations=16
+
+parameters
+length_period age_early;
+
+length_period=5;
+age_early=55;
+
+@#define wt=[1]
+
+@#define wg=0:nbr_work_generations-1
+@#define ag=0:nbr_generations-1
+@#define fwg=0:nbr_work_generations-nbr_early_generations-1
+@#define nbwg=1:nbr_work_generations-1
+@#define nbg=1:nbr_generations-1
+@#define rg=nbr_work_generations:nbr_generations-1
+@#define erg=nbr_work_generations-nbr_early_generations:nbr_work_generations-1
+@#define endg=[nbr_generations-1]
+@#define endw=[nbr_work_generations-1]
+
+@#for i in wg
+var
+n@{i} u@{i} Omega@{i} w@{i} dWHN@{i} dWFN@{i}
+n@{i}_f u@{i}_f Omega@{i}_f w@{i}_f dWFN@{i}_f
+i@{i} lambda@{i} i@{i}_f lambda@{i}_f eta@{i};
+parameters
+Du@{i} Dn@{i} h@{i} h@{i}_f chi@{i} eta@{i}b;
+varexo
+eps_eta@{i};
+@#endfor
+
+@#for i in ag
+var
+c@{i} s@{i} P@{i} P@{i}_f;
+varexo
+beta@{i} beta@{i}_f PD@{i};
+@#endfor
+
+@#for i in erg
+var
+WE@{i} De_@{i};
+parameters
+De_@{i}b;
+varexo
+eps_De_@{i};
+@#endfor
+
+var
+wb wb_f
+Omega Omega_f Omega_hf
+V M qq p
+N N_f
+Q RR H K Y gdp nx FH pi
+ct st wshare rr
+gamma mc phii D DH DF X bs bsY P00_f
+
+rhou rhoe rhol tauw tauc tauf tauk g
+TFP gh rrb
+theta tau1 om1 om2 om2s Ds phijs
+
+DepRatio DepRatio_n DepRatio_d ZARA Ptot Ptot_f sleep du de dl inA inB in
+NBR NBRY NBR2 tauw2 tauf2 tauc2
+PensCorr_L PensCorr_F;
+
+parameters
+rho phi delta alpha beta ann
+fc nu aa
+
+rhoub rhoeb rholb tauwb taucb taufb taukb gb
+TFPb ghb rrbb
+thetab tau1b om1b om2b om2sb Dsb phijsb
+
+NBRYb bsY_iss;
+
+varexo
+P00 P00_foP00
+
+eps_rhol eps_tauw eps_tauf eps_tauc eps_tauk
+eps_rhoe eps_rhou eps_TFP eps_gh eps_theta eps_g
+eps_Ds eps_phijs eps_PensCorr_L eps_PensCorr_F;
+
+
+% ============================================================
+% initialization
+% ============================================================
+
+@#for i in wg
+set_param_value('Du@{i}',Du@{i});
+set_param_value('Dn@{i}',Dn@{i});
+set_param_value('h@{i}',h@{i});
+set_param_value('h@{i}_f',h@{i}_f);
+set_param_value('chi@{i}',chi@{i});
+set_param_value('eta@{i}b',eta@{i}b);
+@#endfor
+
+@#for i in erg
+set_param_value('De_@{i}b',De_@{i}b);
+@#endfor
+
+set_param_value('rho',rho);
+set_param_value('phi',phi);
+set_param_value('delta',delta);
+set_param_value('alpha',alpha);
+set_param_value('beta',beta);
+set_param_value('ann',ann);
+set_param_value('fc',fc);
+set_param_value('nu',nu);
+set_param_value('aa',aa);
+
+set_param_value('rhoub',rhoub);
+set_param_value('rhoeb',rhoeb);
+set_param_value('rholb',rholb);
+set_param_value('tauwb',tauwb);
+set_param_value('taucb',taucb);
+set_param_value('taufb',taufb);
+set_param_value('taukb',taukb);
+set_param_value('gb',gb);
+
+set_param_value('TFPb',TFPb);
+set_param_value('ghb',ghb);
+set_param_value('rrbb',rrbb);
+
+set_param_value('thetab',thetab);
+set_param_value('tau1b',tau1b);
+set_param_value('om1b',om1b);
+set_param_value('om2b',om2b);
+set_param_value('om2sb',om2sb);
+set_param_value('Dsb',Dsb);
+set_param_value('phijsb',phijsb);
+
+set_param_value('bsY_iss',bsY_iss);
+
+NBRYb=NBR_iss/(phii_iss*gdp_iss);
+
+
+% =======================================================
+model(block, mfs=1);
+% ======================================================
+
+% Labor Market Variables in the home country
+% ------------------------------------------
+
+@#for i in fwg
+0=lambda@{i};
+@#endfor
+
+@#for i in wg
+1=n@{i}+u@{i}+i@{i};
+@#endfor
+
+i0=lambda0;
+@#for i in nbwg
+i@{i}=lambda@{i-1}(-1)+lambda@{i}*(1-lambda@{i-1}(-1));
+@#endfor
+
+P0=beta0*P00+PD0;
+@#for i in nbg
+P@{i}=beta@{i}*P@{i-1}(-1)+PD@{i};
+@#endfor
+
+Omega0=P0;
+@#for i in nbwg
+Omega@{i}=(1-lambda@{i})*( 1-lambda@{i-1}(-1)-(1-chi@{i})*n@{i-1}(-1))*P@{i};
+@#endfor
+
+n0=p;
+@#for i in nbwg
+n@{i}=(1-lambda@{i})*((1-p)*(1-chi@{i})*n@{i-1}(-1)+p*(1-lambda@{i-1}(-1)));
+@#endfor
+
+N=
+@#for i in wg
++n@{i}*P@{i}
+@#endfor
+;
+
+% Labor Market Variables in the foreign country
+% ---------------------------------------------
+
+@#for i in wg
+1=n@{i}_f+u@{i}_f+i@{i}_f;
+@#endfor
+
+i0_f=lambda0_f;
+@#for i in nbwg
+i@{i}_f=lambda@{i-1}_f(-1)+lambda@{i}_f*(1-lambda@{i-1}_f(-1));
+@#endfor
+
+% ----------- reproduction cross-border --------------------
+
+P00_f=P00_foP00*P00;
+
+P0_f=beta0_f*P00_f;
+@#for i in nbg
+P@{i}_f=beta@{i}_f*P@{i-1}_f(-1);
+@#endfor
+
+Omega0_f=P0_f;
+@#for i in nbwg
+Omega@{i}_f=(1-lambda@{i}_f)*(1-lambda@{i-1}_f(-1)-(1-chi@{i})*n@{i-1}_f(-1))*P@{i}_f;
+@#endfor
+
+n0_f=p;
+@#for i in nbwg
+n@{i}_f=(1-lambda@{i}_f)*((1-p)*(1-chi@{i})*n@{i-1}_f(-1)+p*(1-lambda@{i-1}_f(-1)));
+@#endfor
+
+N_f=
+@#for i in wg
++n@{i}_f*P@{i}_f
+@#endfor
+;
+
+% Matching
+% ----------
+
+Omega=
+@#for i in wg
++Omega@{i}
+@#endfor
+;
+
+Omega_f=
+@#for i in wg
++Omega@{i}_f
+@#endfor
+;
+
+Omega_hf=Omega+Omega_f;
+
+M=V*Omega_hf/(V^nu+Omega_hf^nu)^(1/nu);
+
+qq=M/V;
+p=M/Omega_hf;
+
+% Flow Budget Constraints (no bequests)
+% --------------------------------------
+
+rhou*w0*u0+ (1-tauw)*w0*n0 = (1+tauc)*c0+s0;
+@#for i in nbwg
+(1+rr*(1-tauk))/(beta@{i})^ann*s@{i-1}(-1)/(1+gh)+rhou*w@{i}*u@{i}+rhoe*w@{i}*i@{i}+(1-tauw)*w@{i}*n@{i}=(1+tauc)*c@{i}+s@{i};
+@#endfor
+@#for i in rg
+(1+rr*(1-tauk))/(beta@{i})^ann*s@{i-1}(-1)/(1+gh)+rhol*wb=(1+tauc)*c@{i}+s@{i};
+@#endfor
+@#for i in endg
+s@{i}=0;
+@#endfor
+
+wb=
+@#for i in wg
++w@{i}/@{nbr_work_generations}
+@#endfor
+;
+
+% Euler Conditions
+% ------------------
+
+@#for i in nbg
+1/(1+tauc)/c@{i-1}=beta*(1+rr(+1)*(1-tauk(+1)))/(1+tauc(+1))/c@{i}(+1)*(beta@{i})^(1-ann)/(1+gh);
+@#endfor
+
+
+% Optimal Participation Rates (Early Retirement)
+% ----------------------------------------------
+
+@#for i in erg
+WE@{i} = 0;
+@#endfor
+
+@#for i in erg
+@#if i in endw
+WE@{i} = ((De_@{i}b*i@{i}^(phi-1))+Du@{i}+(rhoe-rhou)*w@{i}/(1+tauc)/c@{i})*(1-i@{i})-((1-tauw-rhou)*w@{i}/(1+tauc)/c@{i}-(Dn@{i}-Du@{i}))*n@{i};
+@#else
+WE@{i} = ((De_@{i}b*i@{i}^(phi-1))+Du@{i}+(rhoe-rhou)*w@{i}/(1+tauc)/c@{i})*(1-i@{i})-((1-tauw-rhou)*w@{i}/(1+tauc)/c@{i}-(Dn@{i}-Du@{i}))*n@{i}+ beta*beta@{i+1}*WE@{i+1};
+@#endif
+@#endfor
+
+% Household Surplus
+% -------------------
+
+@#for i in wg
+@#if i in endw
+dWHN@{i} = w@{i}*(1-tauw-rhou)/(1+tauc)-(Dn@{i}-Du@{i})*c@{i};
+@#else
+dWHN@{i} = w@{i}*(1-tauw-rhou)/(1+tauc)-(Dn@{i}-Du@{i})*c@{i} + beta*beta@{i+1}*c@{i}/c@{i+1}(+1)*dWHN@{i+1}(+1)*(1-p(+1))*(1-chi@{i+1})*(1-lambda@{i+1}(+1));
+@#endif
+@#endfor
+
+% Foreign household
+% ------------------------
+% participation and wages
+% ........................
+
+@#for i in wg
+lambda@{i}=lambda@{i}_f;
+w@{i}_f=w@{i};
+@#endfor
+
+wb_f=
+@#for i in wg
++w@{i}_f/@{nbr_work_generations}
+@#endfor
+;
+
+% Firm's Behavior
+% -------------------
+
+H=
+@#for i in wg
++h@{i}*n@{i}*P@{i}+h@{i}_f*n@{i}_f*P@{i}_f
+@#endfor
+;
+
+wshare=(1+tauf)*(
+@#for i in wg
++w@{i}*n@{i}*P@{i}+w@{i}_f*n@{i}_f*P@{i}_f
+@#endfor
+)/(phii*gdp);
+
+Y=TFP*H^(1-alpha)*(K)^alpha;
+gdp= TFP*H^(1-alpha)*(K)^alpha-aa*V/phii-fc/phii;
+pi = phii*gdp - wshare*phii*gdp - (rr+delta)*K(-1)/(1+gh);
+(rr(+1)+delta)/(1+rr(+1)*(1-tauk(+1))) = mc*TFP*alpha*(H/(K))^(1-alpha);
+FH=TFP*(1-alpha)*((K)/H)^alpha;
+
+RR=1+rr*(1-tauk);
+rr=rrb+tau1*(exp(bsY_iss-bsY)-1);
+
+% Firm's Surplus
+% ---------------------
+
+@#for i in wg
+@#if i in endw
+dWFN@{i} = h@{i}*mc*FH-(1+tauf)*w@{i};
+dWFN@{i}_f = h@{i}_f*mc*FH-(1+tauf)*w@{i}_f;
+@#else
+dWFN@{i} = h@{i}*mc*FH-(1+tauf)*w@{i} + beta@{i+1}/RR(+1)*dWFN@{i+1}(+1)*(1-chi@{i+1})*(1-lambda@{i+1}(+1))*(1+gh);
+dWFN@{i}_f = h@{i}_f*mc*FH-(1+tauf)*w@{i}_f + beta@{i+1}_f/RR(+1)*dWFN@{i+1}_f(+1)*(1-chi@{i+1})*(1-lambda@{i+1}_f(+1))*(1+gh);
+@#endif
+@#endfor
+
+% Free Entry Condition
+% ---------------------
+
+aa=qq/Omega_hf*(
+@#for i in wg
++Omega@{i}*dWFN@{i}+Omega@{i}_f*dWFN@{i}_f
+@#endfor
+);
+
+% Wage Determination (Rent Sharing)
+% -----------------------------------
+
+@#for i in wg
+(1-eta@{i})*dWHN@{i} = eta@{i}*((1-tauw)/(1+tauf)/(1+tauc))*dWFN@{i};
+@#endfor
+
+% Equilibrium Conditions
+% ----------------------
+
+ct=
+@#for i in ag
++c@{i}*P@{i}
+@#endfor
+;
+
+st=
+@#for i in ag
++s@{i}*P@{i}
+@#endfor
+;
+
+% Non-Arbitrage condition (physical capital-shares)
+% .........................
+
+Q(+1)+pi(+1)=(1+rr(+1))*Q/(1+gh);
+
+% New Open Economy Macroeconomics (NOEM)
+% ---------------------------------------
+
+phii=mc/theta;
+D= ct + K-(1-delta)*K(-1)/(1+gh) + g*gdp*phii + fc+aa*V;
+DH=(1/om1*phii)^(1/(rho-1))*D;
+X=(1/om2s*phii/gamma)^(1/(rho-1))*Ds;
+DF=(1/om2*gamma*phijs)^(1/(rho-1))*D;
+nx=phii*X-phijs*gamma*DF;
+bsY=bs/(phii*gdp);
+Y=DH+X;
+phii*gdp=ct + K-(1-delta)*K(-1)/(1+gh) + g*gdp*phii+nx;
+
+st=K+Q +bs ;
+
+% Policies
+% ----------
+
+rhou=rhoub*eps_rhou;
+rhoe=rhoeb*eps_rhoe;
+rhol=rholb*eps_rhol;
+g=gb*eps_g;
+
+@#for i in erg
+De_@{i}=De_@{i}b*eps_De_@{i};
+@#endfor
+
+TFP=TFPb*eps_TFP;
+gh=ghb*eps_gh;
+
+@#for i in wg
+eta@{i}=eta@{i}b*eps_eta@{i};
+@#endfor
+
+rrb=rrbb;
+
+theta=thetab*eps_theta;
+tau1=tau1b;
+om1=om1b;
+om2=om2b;
+om2s=om2sb;
+Ds=Dsb*eps_Ds;
+phijs=phijsb*eps_phijs;
+
+
+% ----------- RefDR scenario
+
+DepRatio_n=
+@#for i in rg
++P@{i}
+@#endfor
+;
+DepRatio_d=
+@#for i in wg
++P@{i}
+@#endfor
+;
+
+DepRatio=DepRatio_n/DepRatio_d;
+
+ZARA=age_early+length_period*(
+@#for i in erg
++1-i@{i}
+@#endfor
+);
+
+% ----------- WGEM
+
+Ptot=
+@#for i in ag
++P@{i}
+@#endfor
+;
+Ptot_f=
+@#for i in ag
++P@{i}_f
+@#endfor
+;
+
+sleep=(1+rr)*(
+@#for i in nbg
++1/beta@{i}*(1-1/beta@{i}^(ann-1))*s@{i-1}(-1)*P@{i}
+@#endfor
+)/(1+gh);
+
+du=rhou*(
+@#for i in wg
++w@{i}*u@{i}*P@{i}
+@#endfor
+);
+
+de=rhoe*(
+@#for i in erg
++w@{i}*i@{i}*P@{i}+w@{i}_f*i@{i}_f*P@{i}_f
+@#endfor
+);
+
+dl=
+@#for i in rg
++rhol*wb*PensCorr_L*P@{i}+rhol*wb_f*(N_f/(N+N_f))*PensCorr_F*P@{i}_f
+@#endfor
+;
+
+PensCorr_L=eps_PensCorr_L;
+PensCorr_F=eps_PensCorr_F;
+
+inA=(tauw+tauf)*(
+@#for i in wg
++n@{i}*w@{i}*P@{i}+n@{i}_f*w@{i}_f*P@{i}_f
+@#endfor
+);
+
+inB=tauk*rr*(
+@#for i in nbg
++1/beta@{i}^ann*s@{i-1}(-1)*P@{i}
+@#endfor
+)/(1+gh);
+
+in=tauc*ct+inA+inB+sleep;
+NBR=g*phii*gdp+(du+de+dl)-(in);
+NBRY=NBR/(phii*gdp);
+
+% ----------- WGEM Adjustment variable ---------------
+
+tauf2=tauf;
+tauw2=tauw;
+NBR2=NBR;
+tauc2=tauc;
+tauf=taufb*eps_tauf;
+%----- WGEM: adjustment through tauc
+tauc=taucb*eps_tauc;
+%----- WGEM: adjustment through tauk
+tauk=taukb*eps_tauk;
+%----- WGEM: adjustment through tauw
+tauw=tauwb*eps_tauw;
+
+end;
+
+%==================================
+initval;
+%==================================
+
+@#for i in wg
+n@{i}=n@{i}_iss;
+n@{i}_f=n@{i}_f_iss;
+u@{i}=u@{i}_iss;
+u@{i}_f=u@{i}_f_iss;
+Omega@{i}=Omega@{i}_iss;
+Omega@{i}_f=Omega@{i}_f_iss;
+w@{i}=w@{i}_iss;
+w@{i}_f=w@{i}_f_iss;
+dWHN@{i}=dWHN@{i}_iss;
+dWFN@{i}=dWFN@{i}_iss;
+dWFN@{i}_f=dWFN@{i}_f_iss;
+eps_eta@{i}=eps_eta@{i}_iss;
+eta@{i}=eta@{i}b*eps_eta@{i};
+@#endfor
+
+@#for i in erg
+i@{i}=i@{i}_iss;
+lambda@{i}=lambda@{i}_iss;
+i@{i}_f=i@{i}_f_iss;
+lambda@{i}_f=lambda@{i}_f_iss;
+WE@{i}=0;
+eps_De_@{i}=eps_De_@{i}_iss;
+De_@{i}=De_@{i}b*eps_De_@{i}_iss;
+@#endfor
+
+@#for i in fwg
+i@{i}=0;
+lambda@{i}=0;
+i@{i}_f=0;
+lambda@{i}_f=0;
+@#endfor
+
+@#for i in ag
+@#if i in endg
+s@{i}=0;
+@#else
+s@{i}=s@{i}_iss;
+@#endif
+@#endfor
+
+@#for i in ag
+beta@{i}=beta@{i}_iss;
+beta@{i}_f=beta@{i}_f_iss;
+PD@{i}=PD@{i}_iss;
+c@{i}=c@{i}_iss;
+P@{i}=P@{i}_iss;
+P@{i}_f=P@{i}_f_iss;
+@#endfor
+
+wb = wb_iss;
+wb_f = wb_f_iss;
+Omega = Omega_iss;
+Omega_f = Omega_f_iss;
+Omega_hf = Omega_hf_iss;
+V = V_iss ;
+M = M_iss ;
+qq = qq_iss ;
+p = p_iss ;
+N = N_iss ;
+N_f = N_f_iss ;
+Q = Q_iss ;
+RR = RR_iss ;
+H = H_iss ;
+K = K_iss ;
+Y = Y_iss ;
+gdp = gdp_iss ;
+nx = nx_iss ;
+FH = FH_iss ;
+pi = pi_iss ;
+ct = ct_iss ;
+st = st_iss ;
+wshare = wshare_iss ;
+rr = rr_iss ;
+
+gamma = gamma_iss ;
+mc = mc_iss ;
+phii = phii_iss ;
+D = D_iss ;
+DH = DH_iss ;
+DF = DF_iss ;
+X = X_iss ;
+bs = bs_iss ;
+bsY = bsY_iss ;
+P00_f = P00_f_iss;
+
+eps_rhol=eps_rhol_iss;
+eps_rhoe=eps_rhoe_iss;
+eps_rhou=eps_rhou_iss;
+rhou=rhoub*eps_rhou_iss;
+rhoe=rhoeb*eps_rhoe_iss;
+rhol=rholb*eps_rhol_iss;
+eps_tauc=eps_tauc_iss;
+eps_tauk=eps_tauk_iss;
+eps_tauw=eps_tauw_iss;
+eps_tauf=eps_tauf_iss;
+tauw=tauwb*eps_tauw;
+tauc=taucb*eps_tauc;
+tauf=taufb*eps_tauf;
+tauk=taukb*eps_tauk;
+eps_theta=eps_theta_iss;
+eps_gh=eps_gh_iss;
+eps_TFP=eps_TFP_iss;
+eps_g=eps_g_iss;
+g=gb*eps_g_iss;
+TFP=TFPb*eps_TFP_iss;
+gh=ghb*eps_gh_iss;
+theta=thetab*eps_theta_iss;
+
+rrb=rrbb;
+tau1=tau1b;
+om1=om1b;
+om2=om2b;
+om2s=om2sb;
+
+eps_Ds=1;
+eps_phijs=1;
+Ds=Dsb*eps_Ds;
+phijs=phijsb*eps_phijs;
+
+eps_PensCorr_F=eps_PensCorr_F_iss;
+eps_PensCorr_L=eps_PensCorr_L_iss;
+PensCorr_F=eps_PensCorr_F_iss;
+PensCorr_L=eps_PensCorr_L_iss;
+
+P00 = P00_iss ;
+P00_foP00 = P00_foP00_iss ;
+
+DepRatio_n=
+@#for i in rg
++P@{i}
+@#endfor
+;
+DepRatio_d=
+@#for i in wg
++P@{i}
+@#endfor
+;
+
+DepRatio=DepRatio_n/DepRatio_d;
+
+ZARA=age_early+length_period*(
+@#for i in erg
++1-i@{i}
+@#endfor
+);
+
+Ptot=Ptot_iss;
+Ptot_f=Ptot_f_iss;
+sleep=sleep_iss;
+du=du_iss;
+de=de_iss;
+dl=dl_iss;
+
+inA=inA_iss;%(tauw+tauf)*(
+%@#for i in wg
+%+n@{i}*w@{i}*P@{i}+n@{i}_f*w@{i}_f*P@{i}_f
+%@#endfor
+%);
+
+inB=inB_iss;%tauk*rr*(
+%@#for i in nbg
+%+1/beta@{i}^ann*s@{i-1}*P@{i}
+%@#endfor
+%)/(1+gh);
+
+in=in_iss;%tauc*ct+inA+inB+sleep;
+NBR=NBR_iss;%g*phii*gdp+(du+de+dl)-(in);
+NBRY=NBR/(phii*gdp);
+NBR2=NBR;
+tauf2=tauf;
+tauw2=tauw;
+tauc2=tauc;
+
+end;
+
+%========================================================
+% compute initial steady state and check eigenvalues
+%========================================================
+
+resid;
+steady(solve_algo=3);
+check;
+
+%========================================================
+endval;
+%========================================================
+
+@#for i in wg
+n@{i}=n@{i}_fss;
+n@{i}_f=n@{i}_f_fss;
+u@{i}=u@{i}_fss;
+u@{i}_f=u@{i}_f_fss;
+Omega@{i}=Omega@{i}_fss;
+Omega@{i}_f=Omega@{i}_f_fss;
+w@{i}=w@{i}_fss;
+w@{i}_f=w@{i}_f_fss;
+dWHN@{i}=dWHN@{i}_fss;
+dWFN@{i}=dWFN@{i}_fss;
+dWFN@{i}_f=dWFN@{i}_f_fss;
+eps_eta@{i}=eps_eta@{i}_fss;
+eta@{i}=eta@{i}b*eps_eta@{i};
+@#endfor
+
+@#for i in erg
+i@{i}=i@{i}_fss;
+lambda@{i}=lambda@{i}_fss;
+i@{i}_f=i@{i}_f_fss;
+lambda@{i}_f=lambda@{i}_f_fss;
+WE@{i}=0;
+eps_De_@{i}=eps_De_@{i}_fss;
+De_@{i}=De_@{i}b*eps_De_@{i}_fss;
+@#endfor
+
+@#for i in fwg
+i@{i}=0;
+lambda@{i}=0;
+i@{i}_f=0;
+lambda@{i}_f=0;
+@#endfor
+
+@#for i in ag
+@#if i in endg
+s@{i}=0;
+@#else
+s@{i}=s@{i}_fss;
+@#endif
+@#endfor
+
+@#for i in ag
+beta@{i}=beta@{i}_fss;
+beta@{i}_f=beta@{i}_f_fss;
+PD@{i}=PD@{i}_fss;
+c@{i}=c@{i}_fss;
+P@{i}=P@{i}_fss;
+P@{i}_f=P@{i}_f_fss;
+@#endfor
+
+wb = wb_fss;
+wb_f = wb_f_fss;
+Omega = Omega_fss;
+Omega_f = Omega_f_fss;
+Omega_hf = Omega_hf_fss;
+V = V_fss ;
+M = M_fss ;
+qq = qq_fss ;
+p = p_fss ;
+N = N_fss ;
+N_f = N_f_fss ;
+Q = Q_fss ;
+RR = RR_fss ;
+H = H_fss ;
+K = K_fss ;
+Y = Y_fss ;
+gdp = gdp_fss ;
+nx = nx_fss ;
+FH = FH_fss ;
+pi = pi_fss ;
+ct = ct_fss ;
+st = st_fss ;
+wshare = wshare_fss ;
+rr = rr_fss ;
+
+gamma = gamma_fss ;
+mc = mc_fss ;
+phii = phii_fss ;
+D = D_fss ;
+DH = DH_fss ;
+DF = DF_fss ;
+X = X_fss ;
+bs = bs_fss ;
+bsY = bsY_fss ;
+P00_f = P00_f_fss;
+
+eps_rhol=eps_rhol_fss;
+eps_rhoe=eps_rhoe_fss;
+eps_rhou=eps_rhou_fss;
+rhou=rhoub*eps_rhou_fss;
+rhoe=rhoeb*eps_rhoe_fss;
+rhol=rholb*eps_rhol_fss;
+eps_tauc=eps_tauc_fss;
+eps_tauk=eps_tauk_fss;
+eps_tauw=eps_tauw_fss;
+eps_tauf=eps_tauf_fss;
+tauw=tauwb*eps_tauw;
+tauc=taucb*eps_tauc;
+tauf=taufb*eps_tauf;
+tauk=taukb*eps_tauk;
+eps_theta=eps_theta_fss;
+eps_gh=eps_gh_fss;
+eps_TFP=eps_TFP_fss;
+eps_g=eps_g_fss;
+g=gb*eps_g_fss;
+TFP=TFPb*eps_TFP_fss;
+gh=ghb*eps_gh_fss;
+theta=thetab*eps_theta_fss;
+
+rrb=rrbb;
+tau1=tau1b;
+om1=om1b;
+om2=om2b;
+om2s=om2sb;
+
+eps_Ds=1;
+eps_phijs=1;
+Ds=Dsb*eps_Ds;
+phijs=phijsb*eps_phijs;
+
+eps_PensCorr_F=eps_PensCorr_F_fss;
+eps_PensCorr_L=eps_PensCorr_L_fss;
+PensCorr_F=eps_PensCorr_F_fss;
+PensCorr_L=eps_PensCorr_L_fss;
+
+P00 = P00_fss ;
+P00_foP00 = P00_foP00_fss ;
+
+DepRatio_n=
+@#for i in rg
++P@{i}
+@#endfor
+;
+DepRatio_d=
+@#for i in wg
++P@{i}
+@#endfor
+;
+
+DepRatio=DepRatio_n/DepRatio_d;
+
+ZARA=age_early+length_period*(
+@#for i in erg
++1-i@{i}
+@#endfor
+);
+
+Ptot=
+@#for i in ag
++P@{i}
+@#endfor
+;
+Ptot_f=
+@#for i in ag
++P@{i}_f
+@#endfor
+;
+
+sleep=(1+rr)*(
+@#for i in nbg
++1/beta@{i}*(1-1/beta@{i}^(ann-1))*s@{i-1}*P@{i}
+@#endfor
+)/(1+gh);
+
+du=rhou*(
+@#for i in wg
++w@{i}*u@{i}*P@{i}
+@#endfor
+);
+
+de=rhoe*(
+@#for i in erg
++w@{i}*i@{i}*P@{i}+w@{i}_f*i@{i}_f*P@{i}_f
+@#endfor
+);
+
+dl=
+@#for i in rg
++rhol*wb*PensCorr_L*P@{i}+rhol*wb_f*(N_f/(N+N_f))*PensCorr_F*P@{i}_f
+@#endfor
+;
+
+inA=(tauw+tauf)*(
+@#for i in wg
++n@{i}*w@{i}*P@{i}+n@{i}_f*w@{i}_f*P@{i}_f
+@#endfor
+);
+
+inB=tauk*rr*(
+@#for i in nbg
++1/beta@{i}^ann*s@{i-1}*P@{i}
+@#endfor
+)/(1+gh);
+
+in=tauc*ct+inA+inB+sleep;
+NBR=g*phii*gdp+(du+de+dl)-(in);
+NBRY=NBR/(phii*gdp);
+NBR2=NBR;
+tauf2=tauf;
+tauw2=tauw;
+tauc2=tauc;
+
+end;
+
+%========================================================
+% compute final steady state and check eigenvalues
+%========================================================
+
+resid;
+steady(solve_algo=3);
+check;
+
+
+% ===================================================
+shocks;
+% ===================================================
+
+var P00;
+ periods 1:99;
+ values (se_P00);
+
+@#for i in nbg
+var beta@{i};
+ periods 1:99;
+ values (se_beta@{i});
+var beta@{i}_f;
+ periods 1:99;
+ values (se_beta@{i}_f);
+var PD@{i};
+ periods 1:99;
+ values (se_PD@{i});
+@#endfor
+
+var P00_foP00;
+ periods 1:99;
+ values (se_P00_foP00);
+
+var eps_g;
+ periods 1:99;
+ values (se_eps_g);
+
+var eps_PensCorr_F;
+ periods 1:99;
+ values (se_eps_PensCorr_F);
+
+var eps_PensCorr_L;
+ periods 1:99;
+ values (se_eps_PensCorr_L);
+
+end;
+
+% *******************************************
+% Numerical Simulation, Control Parameters
+% *******************************************
+
+model_info;
+
+perfect_foresight_setup(periods=125);
+perfect_foresight_solver(maxit=100);
+
+if ~oo_.deterministic_simulation.status
+ error('Perfect foresight simulation failed')
+end
+
+mfs0=load('lola_solve_one_boundary_results');
+
+if max(max(oo_.endo_simul-mfs0.oo_.endo_simul)) > options_.dynatol.x
+ error('Inconsistency with mfs=0')
+end
diff --git a/tests/deterministic_simulations/lola_solve_one_boundary_mfs2.mod b/tests/deterministic_simulations/lola_solve_one_boundary_mfs2.mod
new file mode 100644
index 0000000000000000000000000000000000000000..7d569e20a1370a08c95bcde81c5f915a99712e8a
--- /dev/null
+++ b/tests/deterministic_simulations/lola_solve_one_boundary_mfs2.mod
@@ -0,0 +1,985 @@
+// Tests option mfs=2 with block
+
+load lola_data.mat
+
+% ====================================================
+% declarations var -- varexo -- para
+% ====================================================
+
+@#define nbr_work_generations=9
+@#define nbr_early_generations=2
+@#define nbr_generations=16
+
+parameters
+length_period age_early;
+
+length_period=5;
+age_early=55;
+
+@#define wt=[1]
+
+@#define wg=0:nbr_work_generations-1
+@#define ag=0:nbr_generations-1
+@#define fwg=0:nbr_work_generations-nbr_early_generations-1
+@#define nbwg=1:nbr_work_generations-1
+@#define nbg=1:nbr_generations-1
+@#define rg=nbr_work_generations:nbr_generations-1
+@#define erg=nbr_work_generations-nbr_early_generations:nbr_work_generations-1
+@#define endg=[nbr_generations-1]
+@#define endw=[nbr_work_generations-1]
+
+@#for i in wg
+var
+n@{i} u@{i} Omega@{i} w@{i} dWHN@{i} dWFN@{i}
+n@{i}_f u@{i}_f Omega@{i}_f w@{i}_f dWFN@{i}_f
+i@{i} lambda@{i} i@{i}_f lambda@{i}_f eta@{i};
+parameters
+Du@{i} Dn@{i} h@{i} h@{i}_f chi@{i} eta@{i}b;
+varexo
+eps_eta@{i};
+@#endfor
+
+@#for i in ag
+var
+c@{i} s@{i} P@{i} P@{i}_f;
+varexo
+beta@{i} beta@{i}_f PD@{i};
+@#endfor
+
+@#for i in erg
+var
+WE@{i} De_@{i};
+parameters
+De_@{i}b;
+varexo
+eps_De_@{i};
+@#endfor
+
+var
+wb wb_f
+Omega Omega_f Omega_hf
+V M qq p
+N N_f
+Q RR H K Y gdp nx FH pi
+ct st wshare rr
+gamma mc phii D DH DF X bs bsY P00_f
+
+rhou rhoe rhol tauw tauc tauf tauk g
+TFP gh rrb
+theta tau1 om1 om2 om2s Ds phijs
+
+DepRatio DepRatio_n DepRatio_d ZARA Ptot Ptot_f sleep du de dl inA inB in
+NBR NBRY NBR2 tauw2 tauf2 tauc2
+PensCorr_L PensCorr_F;
+
+parameters
+rho phi delta alpha beta ann
+fc nu aa
+
+rhoub rhoeb rholb tauwb taucb taufb taukb gb
+TFPb ghb rrbb
+thetab tau1b om1b om2b om2sb Dsb phijsb
+
+NBRYb bsY_iss;
+
+varexo
+P00 P00_foP00
+
+eps_rhol eps_tauw eps_tauf eps_tauc eps_tauk
+eps_rhoe eps_rhou eps_TFP eps_gh eps_theta eps_g
+eps_Ds eps_phijs eps_PensCorr_L eps_PensCorr_F;
+
+
+% ============================================================
+% initialization
+% ============================================================
+
+@#for i in wg
+set_param_value('Du@{i}',Du@{i});
+set_param_value('Dn@{i}',Dn@{i});
+set_param_value('h@{i}',h@{i});
+set_param_value('h@{i}_f',h@{i}_f);
+set_param_value('chi@{i}',chi@{i});
+set_param_value('eta@{i}b',eta@{i}b);
+@#endfor
+
+@#for i in erg
+set_param_value('De_@{i}b',De_@{i}b);
+@#endfor
+
+set_param_value('rho',rho);
+set_param_value('phi',phi);
+set_param_value('delta',delta);
+set_param_value('alpha',alpha);
+set_param_value('beta',beta);
+set_param_value('ann',ann);
+set_param_value('fc',fc);
+set_param_value('nu',nu);
+set_param_value('aa',aa);
+
+set_param_value('rhoub',rhoub);
+set_param_value('rhoeb',rhoeb);
+set_param_value('rholb',rholb);
+set_param_value('tauwb',tauwb);
+set_param_value('taucb',taucb);
+set_param_value('taufb',taufb);
+set_param_value('taukb',taukb);
+set_param_value('gb',gb);
+
+set_param_value('TFPb',TFPb);
+set_param_value('ghb',ghb);
+set_param_value('rrbb',rrbb);
+
+set_param_value('thetab',thetab);
+set_param_value('tau1b',tau1b);
+set_param_value('om1b',om1b);
+set_param_value('om2b',om2b);
+set_param_value('om2sb',om2sb);
+set_param_value('Dsb',Dsb);
+set_param_value('phijsb',phijsb);
+
+set_param_value('bsY_iss',bsY_iss);
+
+NBRYb=NBR_iss/(phii_iss*gdp_iss);
+
+
+% =======================================================
+model(block, mfs=2);
+% ======================================================
+
+% Labor Market Variables in the home country
+% ------------------------------------------
+
+@#for i in fwg
+0=lambda@{i};
+@#endfor
+
+@#for i in wg
+1=n@{i}+u@{i}+i@{i};
+@#endfor
+
+i0=lambda0;
+@#for i in nbwg
+i@{i}=lambda@{i-1}(-1)+lambda@{i}*(1-lambda@{i-1}(-1));
+@#endfor
+
+P0=beta0*P00+PD0;
+@#for i in nbg
+P@{i}=beta@{i}*P@{i-1}(-1)+PD@{i};
+@#endfor
+
+Omega0=P0;
+@#for i in nbwg
+Omega@{i}=(1-lambda@{i})*( 1-lambda@{i-1}(-1)-(1-chi@{i})*n@{i-1}(-1))*P@{i};
+@#endfor
+
+n0=p;
+@#for i in nbwg
+n@{i}=(1-lambda@{i})*((1-p)*(1-chi@{i})*n@{i-1}(-1)+p*(1-lambda@{i-1}(-1)));
+@#endfor
+
+N=
+@#for i in wg
++n@{i}*P@{i}
+@#endfor
+;
+
+% Labor Market Variables in the foreign country
+% ---------------------------------------------
+
+@#for i in wg
+1=n@{i}_f+u@{i}_f+i@{i}_f;
+@#endfor
+
+i0_f=lambda0_f;
+@#for i in nbwg
+i@{i}_f=lambda@{i-1}_f(-1)+lambda@{i}_f*(1-lambda@{i-1}_f(-1));
+@#endfor
+
+% ----------- reproduction cross-border --------------------
+
+P00_f=P00_foP00*P00;
+
+P0_f=beta0_f*P00_f;
+@#for i in nbg
+P@{i}_f=beta@{i}_f*P@{i-1}_f(-1);
+@#endfor
+
+Omega0_f=P0_f;
+@#for i in nbwg
+Omega@{i}_f=(1-lambda@{i}_f)*(1-lambda@{i-1}_f(-1)-(1-chi@{i})*n@{i-1}_f(-1))*P@{i}_f;
+@#endfor
+
+n0_f=p;
+@#for i in nbwg
+n@{i}_f=(1-lambda@{i}_f)*((1-p)*(1-chi@{i})*n@{i-1}_f(-1)+p*(1-lambda@{i-1}_f(-1)));
+@#endfor
+
+N_f=
+@#for i in wg
++n@{i}_f*P@{i}_f
+@#endfor
+;
+
+% Matching
+% ----------
+
+Omega=
+@#for i in wg
++Omega@{i}
+@#endfor
+;
+
+Omega_f=
+@#for i in wg
++Omega@{i}_f
+@#endfor
+;
+
+Omega_hf=Omega+Omega_f;
+
+M=V*Omega_hf/(V^nu+Omega_hf^nu)^(1/nu);
+
+qq=M/V;
+p=M/Omega_hf;
+
+% Flow Budget Constraints (no bequests)
+% --------------------------------------
+
+rhou*w0*u0+ (1-tauw)*w0*n0 = (1+tauc)*c0+s0;
+@#for i in nbwg
+(1+rr*(1-tauk))/(beta@{i})^ann*s@{i-1}(-1)/(1+gh)+rhou*w@{i}*u@{i}+rhoe*w@{i}*i@{i}+(1-tauw)*w@{i}*n@{i}=(1+tauc)*c@{i}+s@{i};
+@#endfor
+@#for i in rg
+(1+rr*(1-tauk))/(beta@{i})^ann*s@{i-1}(-1)/(1+gh)+rhol*wb=(1+tauc)*c@{i}+s@{i};
+@#endfor
+@#for i in endg
+s@{i}=0;
+@#endfor
+
+wb=
+@#for i in wg
++w@{i}/@{nbr_work_generations}
+@#endfor
+;
+
+% Euler Conditions
+% ------------------
+
+@#for i in nbg
+1/(1+tauc)/c@{i-1}=beta*(1+rr(+1)*(1-tauk(+1)))/(1+tauc(+1))/c@{i}(+1)*(beta@{i})^(1-ann)/(1+gh);
+@#endfor
+
+
+% Optimal Participation Rates (Early Retirement)
+% ----------------------------------------------
+
+@#for i in erg
+WE@{i} = 0;
+@#endfor
+
+@#for i in erg
+@#if i in endw
+WE@{i} = ((De_@{i}b*i@{i}^(phi-1))+Du@{i}+(rhoe-rhou)*w@{i}/(1+tauc)/c@{i})*(1-i@{i})-((1-tauw-rhou)*w@{i}/(1+tauc)/c@{i}-(Dn@{i}-Du@{i}))*n@{i};
+@#else
+WE@{i} = ((De_@{i}b*i@{i}^(phi-1))+Du@{i}+(rhoe-rhou)*w@{i}/(1+tauc)/c@{i})*(1-i@{i})-((1-tauw-rhou)*w@{i}/(1+tauc)/c@{i}-(Dn@{i}-Du@{i}))*n@{i}+ beta*beta@{i+1}*WE@{i+1};
+@#endif
+@#endfor
+
+% Household Surplus
+% -------------------
+
+@#for i in wg
+@#if i in endw
+dWHN@{i} = w@{i}*(1-tauw-rhou)/(1+tauc)-(Dn@{i}-Du@{i})*c@{i};
+@#else
+dWHN@{i} = w@{i}*(1-tauw-rhou)/(1+tauc)-(Dn@{i}-Du@{i})*c@{i} + beta*beta@{i+1}*c@{i}/c@{i+1}(+1)*dWHN@{i+1}(+1)*(1-p(+1))*(1-chi@{i+1})*(1-lambda@{i+1}(+1));
+@#endif
+@#endfor
+
+% Foreign household
+% ------------------------
+% participation and wages
+% ........................
+
+@#for i in wg
+lambda@{i}=lambda@{i}_f;
+w@{i}_f=w@{i};
+@#endfor
+
+wb_f=
+@#for i in wg
++w@{i}_f/@{nbr_work_generations}
+@#endfor
+;
+
+% Firm's Behavior
+% -------------------
+
+H=
+@#for i in wg
++h@{i}*n@{i}*P@{i}+h@{i}_f*n@{i}_f*P@{i}_f
+@#endfor
+;
+
+wshare=(1+tauf)*(
+@#for i in wg
++w@{i}*n@{i}*P@{i}+w@{i}_f*n@{i}_f*P@{i}_f
+@#endfor
+)/(phii*gdp);
+
+Y=TFP*H^(1-alpha)*(K)^alpha;
+gdp= TFP*H^(1-alpha)*(K)^alpha-aa*V/phii-fc/phii;
+pi = phii*gdp - wshare*phii*gdp - (rr+delta)*K(-1)/(1+gh);
+(rr(+1)+delta)/(1+rr(+1)*(1-tauk(+1))) = mc*TFP*alpha*(H/(K))^(1-alpha);
+FH=TFP*(1-alpha)*((K)/H)^alpha;
+
+RR=1+rr*(1-tauk);
+rr=rrb+tau1*(exp(bsY_iss-bsY)-1);
+
+% Firm's Surplus
+% ---------------------
+
+@#for i in wg
+@#if i in endw
+dWFN@{i} = h@{i}*mc*FH-(1+tauf)*w@{i};
+dWFN@{i}_f = h@{i}_f*mc*FH-(1+tauf)*w@{i}_f;
+@#else
+dWFN@{i} = h@{i}*mc*FH-(1+tauf)*w@{i} + beta@{i+1}/RR(+1)*dWFN@{i+1}(+1)*(1-chi@{i+1})*(1-lambda@{i+1}(+1))*(1+gh);
+dWFN@{i}_f = h@{i}_f*mc*FH-(1+tauf)*w@{i}_f + beta@{i+1}_f/RR(+1)*dWFN@{i+1}_f(+1)*(1-chi@{i+1})*(1-lambda@{i+1}_f(+1))*(1+gh);
+@#endif
+@#endfor
+
+% Free Entry Condition
+% ---------------------
+
+aa=qq/Omega_hf*(
+@#for i in wg
++Omega@{i}*dWFN@{i}+Omega@{i}_f*dWFN@{i}_f
+@#endfor
+);
+
+% Wage Determination (Rent Sharing)
+% -----------------------------------
+
+@#for i in wg
+(1-eta@{i})*dWHN@{i} = eta@{i}*((1-tauw)/(1+tauf)/(1+tauc))*dWFN@{i};
+@#endfor
+
+% Equilibrium Conditions
+% ----------------------
+
+ct=
+@#for i in ag
++c@{i}*P@{i}
+@#endfor
+;
+
+st=
+@#for i in ag
++s@{i}*P@{i}
+@#endfor
+;
+
+% Non-Arbitrage condition (physical capital-shares)
+% .........................
+
+Q(+1)+pi(+1)=(1+rr(+1))*Q/(1+gh);
+
+% New Open Economy Macroeconomics (NOEM)
+% ---------------------------------------
+
+phii=mc/theta;
+D= ct + K-(1-delta)*K(-1)/(1+gh) + g*gdp*phii + fc+aa*V;
+DH=(1/om1*phii)^(1/(rho-1))*D;
+X=(1/om2s*phii/gamma)^(1/(rho-1))*Ds;
+DF=(1/om2*gamma*phijs)^(1/(rho-1))*D;
+nx=phii*X-phijs*gamma*DF;
+bsY=bs/(phii*gdp);
+Y=DH+X;
+phii*gdp=ct + K-(1-delta)*K(-1)/(1+gh) + g*gdp*phii+nx;
+
+st=K+Q +bs ;
+
+% Policies
+% ----------
+
+rhou=rhoub*eps_rhou;
+rhoe=rhoeb*eps_rhoe;
+rhol=rholb*eps_rhol;
+g=gb*eps_g;
+
+@#for i in erg
+De_@{i}=De_@{i}b*eps_De_@{i};
+@#endfor
+
+TFP=TFPb*eps_TFP;
+gh=ghb*eps_gh;
+
+@#for i in wg
+eta@{i}=eta@{i}b*eps_eta@{i};
+@#endfor
+
+rrb=rrbb;
+
+theta=thetab*eps_theta;
+tau1=tau1b;
+om1=om1b;
+om2=om2b;
+om2s=om2sb;
+Ds=Dsb*eps_Ds;
+phijs=phijsb*eps_phijs;
+
+
+% ----------- RefDR scenario
+
+DepRatio_n=
+@#for i in rg
++P@{i}
+@#endfor
+;
+DepRatio_d=
+@#for i in wg
++P@{i}
+@#endfor
+;
+
+DepRatio=DepRatio_n/DepRatio_d;
+
+ZARA=age_early+length_period*(
+@#for i in erg
++1-i@{i}
+@#endfor
+);
+
+% ----------- WGEM
+
+Ptot=
+@#for i in ag
++P@{i}
+@#endfor
+;
+Ptot_f=
+@#for i in ag
++P@{i}_f
+@#endfor
+;
+
+sleep=(1+rr)*(
+@#for i in nbg
++1/beta@{i}*(1-1/beta@{i}^(ann-1))*s@{i-1}(-1)*P@{i}
+@#endfor
+)/(1+gh);
+
+du=rhou*(
+@#for i in wg
++w@{i}*u@{i}*P@{i}
+@#endfor
+);
+
+de=rhoe*(
+@#for i in erg
++w@{i}*i@{i}*P@{i}+w@{i}_f*i@{i}_f*P@{i}_f
+@#endfor
+);
+
+dl=
+@#for i in rg
++rhol*wb*PensCorr_L*P@{i}+rhol*wb_f*(N_f/(N+N_f))*PensCorr_F*P@{i}_f
+@#endfor
+;
+
+PensCorr_L=eps_PensCorr_L;
+PensCorr_F=eps_PensCorr_F;
+
+inA=(tauw+tauf)*(
+@#for i in wg
++n@{i}*w@{i}*P@{i}+n@{i}_f*w@{i}_f*P@{i}_f
+@#endfor
+);
+
+inB=tauk*rr*(
+@#for i in nbg
++1/beta@{i}^ann*s@{i-1}(-1)*P@{i}
+@#endfor
+)/(1+gh);
+
+in=tauc*ct+inA+inB+sleep;
+NBR=g*phii*gdp+(du+de+dl)-(in);
+NBRY=NBR/(phii*gdp);
+
+% ----------- WGEM Adjustment variable ---------------
+
+tauf2=tauf;
+tauw2=tauw;
+NBR2=NBR;
+tauc2=tauc;
+tauf=taufb*eps_tauf;
+%----- WGEM: adjustment through tauc
+tauc=taucb*eps_tauc;
+%----- WGEM: adjustment through tauk
+tauk=taukb*eps_tauk;
+%----- WGEM: adjustment through tauw
+tauw=tauwb*eps_tauw;
+
+end;
+
+%==================================
+initval;
+%==================================
+
+@#for i in wg
+n@{i}=n@{i}_iss;
+n@{i}_f=n@{i}_f_iss;
+u@{i}=u@{i}_iss;
+u@{i}_f=u@{i}_f_iss;
+Omega@{i}=Omega@{i}_iss;
+Omega@{i}_f=Omega@{i}_f_iss;
+w@{i}=w@{i}_iss;
+w@{i}_f=w@{i}_f_iss;
+dWHN@{i}=dWHN@{i}_iss;
+dWFN@{i}=dWFN@{i}_iss;
+dWFN@{i}_f=dWFN@{i}_f_iss;
+eps_eta@{i}=eps_eta@{i}_iss;
+eta@{i}=eta@{i}b*eps_eta@{i};
+@#endfor
+
+@#for i in erg
+i@{i}=i@{i}_iss;
+lambda@{i}=lambda@{i}_iss;
+i@{i}_f=i@{i}_f_iss;
+lambda@{i}_f=lambda@{i}_f_iss;
+WE@{i}=0;
+eps_De_@{i}=eps_De_@{i}_iss;
+De_@{i}=De_@{i}b*eps_De_@{i}_iss;
+@#endfor
+
+@#for i in fwg
+i@{i}=0;
+lambda@{i}=0;
+i@{i}_f=0;
+lambda@{i}_f=0;
+@#endfor
+
+@#for i in ag
+@#if i in endg
+s@{i}=0;
+@#else
+s@{i}=s@{i}_iss;
+@#endif
+@#endfor
+
+@#for i in ag
+beta@{i}=beta@{i}_iss;
+beta@{i}_f=beta@{i}_f_iss;
+PD@{i}=PD@{i}_iss;
+c@{i}=c@{i}_iss;
+P@{i}=P@{i}_iss;
+P@{i}_f=P@{i}_f_iss;
+@#endfor
+
+wb = wb_iss;
+wb_f = wb_f_iss;
+Omega = Omega_iss;
+Omega_f = Omega_f_iss;
+Omega_hf = Omega_hf_iss;
+V = V_iss ;
+M = M_iss ;
+qq = qq_iss ;
+p = p_iss ;
+N = N_iss ;
+N_f = N_f_iss ;
+Q = Q_iss ;
+RR = RR_iss ;
+H = H_iss ;
+K = K_iss ;
+Y = Y_iss ;
+gdp = gdp_iss ;
+nx = nx_iss ;
+FH = FH_iss ;
+pi = pi_iss ;
+ct = ct_iss ;
+st = st_iss ;
+wshare = wshare_iss ;
+rr = rr_iss ;
+
+gamma = gamma_iss ;
+mc = mc_iss ;
+phii = phii_iss ;
+D = D_iss ;
+DH = DH_iss ;
+DF = DF_iss ;
+X = X_iss ;
+bs = bs_iss ;
+bsY = bsY_iss ;
+P00_f = P00_f_iss;
+
+eps_rhol=eps_rhol_iss;
+eps_rhoe=eps_rhoe_iss;
+eps_rhou=eps_rhou_iss;
+rhou=rhoub*eps_rhou_iss;
+rhoe=rhoeb*eps_rhoe_iss;
+rhol=rholb*eps_rhol_iss;
+eps_tauc=eps_tauc_iss;
+eps_tauk=eps_tauk_iss;
+eps_tauw=eps_tauw_iss;
+eps_tauf=eps_tauf_iss;
+tauw=tauwb*eps_tauw;
+tauc=taucb*eps_tauc;
+tauf=taufb*eps_tauf;
+tauk=taukb*eps_tauk;
+eps_theta=eps_theta_iss;
+eps_gh=eps_gh_iss;
+eps_TFP=eps_TFP_iss;
+eps_g=eps_g_iss;
+g=gb*eps_g_iss;
+TFP=TFPb*eps_TFP_iss;
+gh=ghb*eps_gh_iss;
+theta=thetab*eps_theta_iss;
+
+rrb=rrbb;
+tau1=tau1b;
+om1=om1b;
+om2=om2b;
+om2s=om2sb;
+
+eps_Ds=1;
+eps_phijs=1;
+Ds=Dsb*eps_Ds;
+phijs=phijsb*eps_phijs;
+
+eps_PensCorr_F=eps_PensCorr_F_iss;
+eps_PensCorr_L=eps_PensCorr_L_iss;
+PensCorr_F=eps_PensCorr_F_iss;
+PensCorr_L=eps_PensCorr_L_iss;
+
+P00 = P00_iss ;
+P00_foP00 = P00_foP00_iss ;
+
+DepRatio_n=
+@#for i in rg
++P@{i}
+@#endfor
+;
+DepRatio_d=
+@#for i in wg
++P@{i}
+@#endfor
+;
+
+DepRatio=DepRatio_n/DepRatio_d;
+
+ZARA=age_early+length_period*(
+@#for i in erg
++1-i@{i}
+@#endfor
+);
+
+Ptot=Ptot_iss;
+Ptot_f=Ptot_f_iss;
+sleep=sleep_iss;
+du=du_iss;
+de=de_iss;
+dl=dl_iss;
+
+inA=inA_iss;%(tauw+tauf)*(
+%@#for i in wg
+%+n@{i}*w@{i}*P@{i}+n@{i}_f*w@{i}_f*P@{i}_f
+%@#endfor
+%);
+
+inB=inB_iss;%tauk*rr*(
+%@#for i in nbg
+%+1/beta@{i}^ann*s@{i-1}*P@{i}
+%@#endfor
+%)/(1+gh);
+
+in=in_iss;%tauc*ct+inA+inB+sleep;
+NBR=NBR_iss;%g*phii*gdp+(du+de+dl)-(in);
+NBRY=NBR/(phii*gdp);
+NBR2=NBR;
+tauf2=tauf;
+tauw2=tauw;
+tauc2=tauc;
+
+end;
+
+%========================================================
+% compute initial steady state and check eigenvalues
+%========================================================
+
+resid;
+steady(solve_algo=3);
+check;
+
+%========================================================
+endval;
+%========================================================
+
+@#for i in wg
+n@{i}=n@{i}_fss;
+n@{i}_f=n@{i}_f_fss;
+u@{i}=u@{i}_fss;
+u@{i}_f=u@{i}_f_fss;
+Omega@{i}=Omega@{i}_fss;
+Omega@{i}_f=Omega@{i}_f_fss;
+w@{i}=w@{i}_fss;
+w@{i}_f=w@{i}_f_fss;
+dWHN@{i}=dWHN@{i}_fss;
+dWFN@{i}=dWFN@{i}_fss;
+dWFN@{i}_f=dWFN@{i}_f_fss;
+eps_eta@{i}=eps_eta@{i}_fss;
+eta@{i}=eta@{i}b*eps_eta@{i};
+@#endfor
+
+@#for i in erg
+i@{i}=i@{i}_fss;
+lambda@{i}=lambda@{i}_fss;
+i@{i}_f=i@{i}_f_fss;
+lambda@{i}_f=lambda@{i}_f_fss;
+WE@{i}=0;
+eps_De_@{i}=eps_De_@{i}_fss;
+De_@{i}=De_@{i}b*eps_De_@{i}_fss;
+@#endfor
+
+@#for i in fwg
+i@{i}=0;
+lambda@{i}=0;
+i@{i}_f=0;
+lambda@{i}_f=0;
+@#endfor
+
+@#for i in ag
+@#if i in endg
+s@{i}=0;
+@#else
+s@{i}=s@{i}_fss;
+@#endif
+@#endfor
+
+@#for i in ag
+beta@{i}=beta@{i}_fss;
+beta@{i}_f=beta@{i}_f_fss;
+PD@{i}=PD@{i}_fss;
+c@{i}=c@{i}_fss;
+P@{i}=P@{i}_fss;
+P@{i}_f=P@{i}_f_fss;
+@#endfor
+
+wb = wb_fss;
+wb_f = wb_f_fss;
+Omega = Omega_fss;
+Omega_f = Omega_f_fss;
+Omega_hf = Omega_hf_fss;
+V = V_fss ;
+M = M_fss ;
+qq = qq_fss ;
+p = p_fss ;
+N = N_fss ;
+N_f = N_f_fss ;
+Q = Q_fss ;
+RR = RR_fss ;
+H = H_fss ;
+K = K_fss ;
+Y = Y_fss ;
+gdp = gdp_fss ;
+nx = nx_fss ;
+FH = FH_fss ;
+pi = pi_fss ;
+ct = ct_fss ;
+st = st_fss ;
+wshare = wshare_fss ;
+rr = rr_fss ;
+
+gamma = gamma_fss ;
+mc = mc_fss ;
+phii = phii_fss ;
+D = D_fss ;
+DH = DH_fss ;
+DF = DF_fss ;
+X = X_fss ;
+bs = bs_fss ;
+bsY = bsY_fss ;
+P00_f = P00_f_fss;
+
+eps_rhol=eps_rhol_fss;
+eps_rhoe=eps_rhoe_fss;
+eps_rhou=eps_rhou_fss;
+rhou=rhoub*eps_rhou_fss;
+rhoe=rhoeb*eps_rhoe_fss;
+rhol=rholb*eps_rhol_fss;
+eps_tauc=eps_tauc_fss;
+eps_tauk=eps_tauk_fss;
+eps_tauw=eps_tauw_fss;
+eps_tauf=eps_tauf_fss;
+tauw=tauwb*eps_tauw;
+tauc=taucb*eps_tauc;
+tauf=taufb*eps_tauf;
+tauk=taukb*eps_tauk;
+eps_theta=eps_theta_fss;
+eps_gh=eps_gh_fss;
+eps_TFP=eps_TFP_fss;
+eps_g=eps_g_fss;
+g=gb*eps_g_fss;
+TFP=TFPb*eps_TFP_fss;
+gh=ghb*eps_gh_fss;
+theta=thetab*eps_theta_fss;
+
+rrb=rrbb;
+tau1=tau1b;
+om1=om1b;
+om2=om2b;
+om2s=om2sb;
+
+eps_Ds=1;
+eps_phijs=1;
+Ds=Dsb*eps_Ds;
+phijs=phijsb*eps_phijs;
+
+eps_PensCorr_F=eps_PensCorr_F_fss;
+eps_PensCorr_L=eps_PensCorr_L_fss;
+PensCorr_F=eps_PensCorr_F_fss;
+PensCorr_L=eps_PensCorr_L_fss;
+
+P00 = P00_fss ;
+P00_foP00 = P00_foP00_fss ;
+
+DepRatio_n=
+@#for i in rg
++P@{i}
+@#endfor
+;
+DepRatio_d=
+@#for i in wg
++P@{i}
+@#endfor
+;
+
+DepRatio=DepRatio_n/DepRatio_d;
+
+ZARA=age_early+length_period*(
+@#for i in erg
++1-i@{i}
+@#endfor
+);
+
+Ptot=
+@#for i in ag
++P@{i}
+@#endfor
+;
+Ptot_f=
+@#for i in ag
++P@{i}_f
+@#endfor
+;
+
+sleep=(1+rr)*(
+@#for i in nbg
++1/beta@{i}*(1-1/beta@{i}^(ann-1))*s@{i-1}*P@{i}
+@#endfor
+)/(1+gh);
+
+du=rhou*(
+@#for i in wg
++w@{i}*u@{i}*P@{i}
+@#endfor
+);
+
+de=rhoe*(
+@#for i in erg
++w@{i}*i@{i}*P@{i}+w@{i}_f*i@{i}_f*P@{i}_f
+@#endfor
+);
+
+dl=
+@#for i in rg
++rhol*wb*PensCorr_L*P@{i}+rhol*wb_f*(N_f/(N+N_f))*PensCorr_F*P@{i}_f
+@#endfor
+;
+
+inA=(tauw+tauf)*(
+@#for i in wg
++n@{i}*w@{i}*P@{i}+n@{i}_f*w@{i}_f*P@{i}_f
+@#endfor
+);
+
+inB=tauk*rr*(
+@#for i in nbg
++1/beta@{i}^ann*s@{i-1}*P@{i}
+@#endfor
+)/(1+gh);
+
+in=tauc*ct+inA+inB+sleep;
+NBR=g*phii*gdp+(du+de+dl)-(in);
+NBRY=NBR/(phii*gdp);
+NBR2=NBR;
+tauf2=tauf;
+tauw2=tauw;
+tauc2=tauc;
+
+end;
+
+%========================================================
+% compute final steady state and check eigenvalues
+%========================================================
+
+resid;
+steady(solve_algo=3);
+check;
+
+
+% ===================================================
+shocks;
+% ===================================================
+
+var P00;
+ periods 1:99;
+ values (se_P00);
+
+@#for i in nbg
+var beta@{i};
+ periods 1:99;
+ values (se_beta@{i});
+var beta@{i}_f;
+ periods 1:99;
+ values (se_beta@{i}_f);
+var PD@{i};
+ periods 1:99;
+ values (se_PD@{i});
+@#endfor
+
+var P00_foP00;
+ periods 1:99;
+ values (se_P00_foP00);
+
+var eps_g;
+ periods 1:99;
+ values (se_eps_g);
+
+var eps_PensCorr_F;
+ periods 1:99;
+ values (se_eps_PensCorr_F);
+
+var eps_PensCorr_L;
+ periods 1:99;
+ values (se_eps_PensCorr_L);
+
+end;
+
+% *******************************************
+% Numerical Simulation, Control Parameters
+% *******************************************
+
+perfect_foresight_setup(periods=125);
+perfect_foresight_solver(maxit=100);
+
+if ~oo_.deterministic_simulation.status
+ error('Perfect foresight simulation failed')
+end
+
+mfs0=load('lola_solve_one_boundary_results');
+
+if max(max(oo_.endo_simul-mfs0.oo_.endo_simul)) > options_.dynatol.x
+ error('Inconsistency with mfs=0')
+end
diff --git a/tests/deterministic_simulations/lola_solve_one_boundary_mfs3.mod b/tests/deterministic_simulations/lola_solve_one_boundary_mfs3.mod
new file mode 100644
index 0000000000000000000000000000000000000000..2a64bd222a446c02abf07026d71939cf35e5feaa
--- /dev/null
+++ b/tests/deterministic_simulations/lola_solve_one_boundary_mfs3.mod
@@ -0,0 +1,985 @@
+// Tests option mfs=3 with block
+
+load lola_data.mat
+
+% ====================================================
+% declarations var -- varexo -- para
+% ====================================================
+
+@#define nbr_work_generations=9
+@#define nbr_early_generations=2
+@#define nbr_generations=16
+
+parameters
+length_period age_early;
+
+length_period=5;
+age_early=55;
+
+@#define wt=[1]
+
+@#define wg=0:nbr_work_generations-1
+@#define ag=0:nbr_generations-1
+@#define fwg=0:nbr_work_generations-nbr_early_generations-1
+@#define nbwg=1:nbr_work_generations-1
+@#define nbg=1:nbr_generations-1
+@#define rg=nbr_work_generations:nbr_generations-1
+@#define erg=nbr_work_generations-nbr_early_generations:nbr_work_generations-1
+@#define endg=[nbr_generations-1]
+@#define endw=[nbr_work_generations-1]
+
+@#for i in wg
+var
+n@{i} u@{i} Omega@{i} w@{i} dWHN@{i} dWFN@{i}
+n@{i}_f u@{i}_f Omega@{i}_f w@{i}_f dWFN@{i}_f
+i@{i} lambda@{i} i@{i}_f lambda@{i}_f eta@{i};
+parameters
+Du@{i} Dn@{i} h@{i} h@{i}_f chi@{i} eta@{i}b;
+varexo
+eps_eta@{i};
+@#endfor
+
+@#for i in ag
+var
+c@{i} s@{i} P@{i} P@{i}_f;
+varexo
+beta@{i} beta@{i}_f PD@{i};
+@#endfor
+
+@#for i in erg
+var
+WE@{i} De_@{i};
+parameters
+De_@{i}b;
+varexo
+eps_De_@{i};
+@#endfor
+
+var
+wb wb_f
+Omega Omega_f Omega_hf
+V M qq p
+N N_f
+Q RR H K Y gdp nx FH pi
+ct st wshare rr
+gamma mc phii D DH DF X bs bsY P00_f
+
+rhou rhoe rhol tauw tauc tauf tauk g
+TFP gh rrb
+theta tau1 om1 om2 om2s Ds phijs
+
+DepRatio DepRatio_n DepRatio_d ZARA Ptot Ptot_f sleep du de dl inA inB in
+NBR NBRY NBR2 tauw2 tauf2 tauc2
+PensCorr_L PensCorr_F;
+
+parameters
+rho phi delta alpha beta ann
+fc nu aa
+
+rhoub rhoeb rholb tauwb taucb taufb taukb gb
+TFPb ghb rrbb
+thetab tau1b om1b om2b om2sb Dsb phijsb
+
+NBRYb bsY_iss;
+
+varexo
+P00 P00_foP00
+
+eps_rhol eps_tauw eps_tauf eps_tauc eps_tauk
+eps_rhoe eps_rhou eps_TFP eps_gh eps_theta eps_g
+eps_Ds eps_phijs eps_PensCorr_L eps_PensCorr_F;
+
+
+% ============================================================
+% initialization
+% ============================================================
+
+@#for i in wg
+set_param_value('Du@{i}',Du@{i});
+set_param_value('Dn@{i}',Dn@{i});
+set_param_value('h@{i}',h@{i});
+set_param_value('h@{i}_f',h@{i}_f);
+set_param_value('chi@{i}',chi@{i});
+set_param_value('eta@{i}b',eta@{i}b);
+@#endfor
+
+@#for i in erg
+set_param_value('De_@{i}b',De_@{i}b);
+@#endfor
+
+set_param_value('rho',rho);
+set_param_value('phi',phi);
+set_param_value('delta',delta);
+set_param_value('alpha',alpha);
+set_param_value('beta',beta);
+set_param_value('ann',ann);
+set_param_value('fc',fc);
+set_param_value('nu',nu);
+set_param_value('aa',aa);
+
+set_param_value('rhoub',rhoub);
+set_param_value('rhoeb',rhoeb);
+set_param_value('rholb',rholb);
+set_param_value('tauwb',tauwb);
+set_param_value('taucb',taucb);
+set_param_value('taufb',taufb);
+set_param_value('taukb',taukb);
+set_param_value('gb',gb);
+
+set_param_value('TFPb',TFPb);
+set_param_value('ghb',ghb);
+set_param_value('rrbb',rrbb);
+
+set_param_value('thetab',thetab);
+set_param_value('tau1b',tau1b);
+set_param_value('om1b',om1b);
+set_param_value('om2b',om2b);
+set_param_value('om2sb',om2sb);
+set_param_value('Dsb',Dsb);
+set_param_value('phijsb',phijsb);
+
+set_param_value('bsY_iss',bsY_iss);
+
+NBRYb=NBR_iss/(phii_iss*gdp_iss);
+
+
+% =======================================================
+model(block, mfs=3);
+% ======================================================
+
+% Labor Market Variables in the home country
+% ------------------------------------------
+
+@#for i in fwg
+0=lambda@{i};
+@#endfor
+
+@#for i in wg
+1=n@{i}+u@{i}+i@{i};
+@#endfor
+
+i0=lambda0;
+@#for i in nbwg
+i@{i}=lambda@{i-1}(-1)+lambda@{i}*(1-lambda@{i-1}(-1));
+@#endfor
+
+P0=beta0*P00+PD0;
+@#for i in nbg
+P@{i}=beta@{i}*P@{i-1}(-1)+PD@{i};
+@#endfor
+
+Omega0=P0;
+@#for i in nbwg
+Omega@{i}=(1-lambda@{i})*( 1-lambda@{i-1}(-1)-(1-chi@{i})*n@{i-1}(-1))*P@{i};
+@#endfor
+
+n0=p;
+@#for i in nbwg
+n@{i}=(1-lambda@{i})*((1-p)*(1-chi@{i})*n@{i-1}(-1)+p*(1-lambda@{i-1}(-1)));
+@#endfor
+
+N=
+@#for i in wg
++n@{i}*P@{i}
+@#endfor
+;
+
+% Labor Market Variables in the foreign country
+% ---------------------------------------------
+
+@#for i in wg
+1=n@{i}_f+u@{i}_f+i@{i}_f;
+@#endfor
+
+i0_f=lambda0_f;
+@#for i in nbwg
+i@{i}_f=lambda@{i-1}_f(-1)+lambda@{i}_f*(1-lambda@{i-1}_f(-1));
+@#endfor
+
+% ----------- reproduction cross-border --------------------
+
+P00_f=P00_foP00*P00;
+
+P0_f=beta0_f*P00_f;
+@#for i in nbg
+P@{i}_f=beta@{i}_f*P@{i-1}_f(-1);
+@#endfor
+
+Omega0_f=P0_f;
+@#for i in nbwg
+Omega@{i}_f=(1-lambda@{i}_f)*(1-lambda@{i-1}_f(-1)-(1-chi@{i})*n@{i-1}_f(-1))*P@{i}_f;
+@#endfor
+
+n0_f=p;
+@#for i in nbwg
+n@{i}_f=(1-lambda@{i}_f)*((1-p)*(1-chi@{i})*n@{i-1}_f(-1)+p*(1-lambda@{i-1}_f(-1)));
+@#endfor
+
+N_f=
+@#for i in wg
++n@{i}_f*P@{i}_f
+@#endfor
+;
+
+% Matching
+% ----------
+
+Omega=
+@#for i in wg
++Omega@{i}
+@#endfor
+;
+
+Omega_f=
+@#for i in wg
++Omega@{i}_f
+@#endfor
+;
+
+Omega_hf=Omega+Omega_f;
+
+M=V*Omega_hf/(V^nu+Omega_hf^nu)^(1/nu);
+
+qq=M/V;
+p=M/Omega_hf;
+
+% Flow Budget Constraints (no bequests)
+% --------------------------------------
+
+rhou*w0*u0+ (1-tauw)*w0*n0 = (1+tauc)*c0+s0;
+@#for i in nbwg
+(1+rr*(1-tauk))/(beta@{i})^ann*s@{i-1}(-1)/(1+gh)+rhou*w@{i}*u@{i}+rhoe*w@{i}*i@{i}+(1-tauw)*w@{i}*n@{i}=(1+tauc)*c@{i}+s@{i};
+@#endfor
+@#for i in rg
+(1+rr*(1-tauk))/(beta@{i})^ann*s@{i-1}(-1)/(1+gh)+rhol*wb=(1+tauc)*c@{i}+s@{i};
+@#endfor
+@#for i in endg
+s@{i}=0;
+@#endfor
+
+wb=
+@#for i in wg
++w@{i}/@{nbr_work_generations}
+@#endfor
+;
+
+% Euler Conditions
+% ------------------
+
+@#for i in nbg
+1/(1+tauc)/c@{i-1}=beta*(1+rr(+1)*(1-tauk(+1)))/(1+tauc(+1))/c@{i}(+1)*(beta@{i})^(1-ann)/(1+gh);
+@#endfor
+
+
+% Optimal Participation Rates (Early Retirement)
+% ----------------------------------------------
+
+@#for i in erg
+WE@{i} = 0;
+@#endfor
+
+@#for i in erg
+@#if i in endw
+WE@{i} = ((De_@{i}b*i@{i}^(phi-1))+Du@{i}+(rhoe-rhou)*w@{i}/(1+tauc)/c@{i})*(1-i@{i})-((1-tauw-rhou)*w@{i}/(1+tauc)/c@{i}-(Dn@{i}-Du@{i}))*n@{i};
+@#else
+WE@{i} = ((De_@{i}b*i@{i}^(phi-1))+Du@{i}+(rhoe-rhou)*w@{i}/(1+tauc)/c@{i})*(1-i@{i})-((1-tauw-rhou)*w@{i}/(1+tauc)/c@{i}-(Dn@{i}-Du@{i}))*n@{i}+ beta*beta@{i+1}*WE@{i+1};
+@#endif
+@#endfor
+
+% Household Surplus
+% -------------------
+
+@#for i in wg
+@#if i in endw
+dWHN@{i} = w@{i}*(1-tauw-rhou)/(1+tauc)-(Dn@{i}-Du@{i})*c@{i};
+@#else
+dWHN@{i} = w@{i}*(1-tauw-rhou)/(1+tauc)-(Dn@{i}-Du@{i})*c@{i} + beta*beta@{i+1}*c@{i}/c@{i+1}(+1)*dWHN@{i+1}(+1)*(1-p(+1))*(1-chi@{i+1})*(1-lambda@{i+1}(+1));
+@#endif
+@#endfor
+
+% Foreign household
+% ------------------------
+% participation and wages
+% ........................
+
+@#for i in wg
+lambda@{i}=lambda@{i}_f;
+w@{i}_f=w@{i};
+@#endfor
+
+wb_f=
+@#for i in wg
++w@{i}_f/@{nbr_work_generations}
+@#endfor
+;
+
+% Firm's Behavior
+% -------------------
+
+H=
+@#for i in wg
++h@{i}*n@{i}*P@{i}+h@{i}_f*n@{i}_f*P@{i}_f
+@#endfor
+;
+
+wshare=(1+tauf)*(
+@#for i in wg
++w@{i}*n@{i}*P@{i}+w@{i}_f*n@{i}_f*P@{i}_f
+@#endfor
+)/(phii*gdp);
+
+Y=TFP*H^(1-alpha)*(K)^alpha;
+gdp= TFP*H^(1-alpha)*(K)^alpha-aa*V/phii-fc/phii;
+pi = phii*gdp - wshare*phii*gdp - (rr+delta)*K(-1)/(1+gh);
+(rr(+1)+delta)/(1+rr(+1)*(1-tauk(+1))) = mc*TFP*alpha*(H/(K))^(1-alpha);
+FH=TFP*(1-alpha)*((K)/H)^alpha;
+
+RR=1+rr*(1-tauk);
+rr=rrb+tau1*(exp(bsY_iss-bsY)-1);
+
+% Firm's Surplus
+% ---------------------
+
+@#for i in wg
+@#if i in endw
+dWFN@{i} = h@{i}*mc*FH-(1+tauf)*w@{i};
+dWFN@{i}_f = h@{i}_f*mc*FH-(1+tauf)*w@{i}_f;
+@#else
+dWFN@{i} = h@{i}*mc*FH-(1+tauf)*w@{i} + beta@{i+1}/RR(+1)*dWFN@{i+1}(+1)*(1-chi@{i+1})*(1-lambda@{i+1}(+1))*(1+gh);
+dWFN@{i}_f = h@{i}_f*mc*FH-(1+tauf)*w@{i}_f + beta@{i+1}_f/RR(+1)*dWFN@{i+1}_f(+1)*(1-chi@{i+1})*(1-lambda@{i+1}_f(+1))*(1+gh);
+@#endif
+@#endfor
+
+% Free Entry Condition
+% ---------------------
+
+aa=qq/Omega_hf*(
+@#for i in wg
++Omega@{i}*dWFN@{i}+Omega@{i}_f*dWFN@{i}_f
+@#endfor
+);
+
+% Wage Determination (Rent Sharing)
+% -----------------------------------
+
+@#for i in wg
+(1-eta@{i})*dWHN@{i} = eta@{i}*((1-tauw)/(1+tauf)/(1+tauc))*dWFN@{i};
+@#endfor
+
+% Equilibrium Conditions
+% ----------------------
+
+ct=
+@#for i in ag
++c@{i}*P@{i}
+@#endfor
+;
+
+st=
+@#for i in ag
++s@{i}*P@{i}
+@#endfor
+;
+
+% Non-Arbitrage condition (physical capital-shares)
+% .........................
+
+Q(+1)+pi(+1)=(1+rr(+1))*Q/(1+gh);
+
+% New Open Economy Macroeconomics (NOEM)
+% ---------------------------------------
+
+phii=mc/theta;
+D= ct + K-(1-delta)*K(-1)/(1+gh) + g*gdp*phii + fc+aa*V;
+DH=(1/om1*phii)^(1/(rho-1))*D;
+X=(1/om2s*phii/gamma)^(1/(rho-1))*Ds;
+DF=(1/om2*gamma*phijs)^(1/(rho-1))*D;
+nx=phii*X-phijs*gamma*DF;
+bsY=bs/(phii*gdp);
+Y=DH+X;
+phii*gdp=ct + K-(1-delta)*K(-1)/(1+gh) + g*gdp*phii+nx;
+
+st=K+Q +bs ;
+
+% Policies
+% ----------
+
+rhou=rhoub*eps_rhou;
+rhoe=rhoeb*eps_rhoe;
+rhol=rholb*eps_rhol;
+g=gb*eps_g;
+
+@#for i in erg
+De_@{i}=De_@{i}b*eps_De_@{i};
+@#endfor
+
+TFP=TFPb*eps_TFP;
+gh=ghb*eps_gh;
+
+@#for i in wg
+eta@{i}=eta@{i}b*eps_eta@{i};
+@#endfor
+
+rrb=rrbb;
+
+theta=thetab*eps_theta;
+tau1=tau1b;
+om1=om1b;
+om2=om2b;
+om2s=om2sb;
+Ds=Dsb*eps_Ds;
+phijs=phijsb*eps_phijs;
+
+
+% ----------- RefDR scenario
+
+DepRatio_n=
+@#for i in rg
++P@{i}
+@#endfor
+;
+DepRatio_d=
+@#for i in wg
++P@{i}
+@#endfor
+;
+
+DepRatio=DepRatio_n/DepRatio_d;
+
+ZARA=age_early+length_period*(
+@#for i in erg
++1-i@{i}
+@#endfor
+);
+
+% ----------- WGEM
+
+Ptot=
+@#for i in ag
++P@{i}
+@#endfor
+;
+Ptot_f=
+@#for i in ag
++P@{i}_f
+@#endfor
+;
+
+sleep=(1+rr)*(
+@#for i in nbg
++1/beta@{i}*(1-1/beta@{i}^(ann-1))*s@{i-1}(-1)*P@{i}
+@#endfor
+)/(1+gh);
+
+du=rhou*(
+@#for i in wg
++w@{i}*u@{i}*P@{i}
+@#endfor
+);
+
+de=rhoe*(
+@#for i in erg
++w@{i}*i@{i}*P@{i}+w@{i}_f*i@{i}_f*P@{i}_f
+@#endfor
+);
+
+dl=
+@#for i in rg
++rhol*wb*PensCorr_L*P@{i}+rhol*wb_f*(N_f/(N+N_f))*PensCorr_F*P@{i}_f
+@#endfor
+;
+
+PensCorr_L=eps_PensCorr_L;
+PensCorr_F=eps_PensCorr_F;
+
+inA=(tauw+tauf)*(
+@#for i in wg
++n@{i}*w@{i}*P@{i}+n@{i}_f*w@{i}_f*P@{i}_f
+@#endfor
+);
+
+inB=tauk*rr*(
+@#for i in nbg
++1/beta@{i}^ann*s@{i-1}(-1)*P@{i}
+@#endfor
+)/(1+gh);
+
+in=tauc*ct+inA+inB+sleep;
+NBR=g*phii*gdp+(du+de+dl)-(in);
+NBRY=NBR/(phii*gdp);
+
+% ----------- WGEM Adjustment variable ---------------
+
+tauf2=tauf;
+tauw2=tauw;
+NBR2=NBR;
+tauc2=tauc;
+tauf=taufb*eps_tauf;
+%----- WGEM: adjustment through tauc
+tauc=taucb*eps_tauc;
+%----- WGEM: adjustment through tauk
+tauk=taukb*eps_tauk;
+%----- WGEM: adjustment through tauw
+tauw=tauwb*eps_tauw;
+
+end;
+
+%==================================
+initval;
+%==================================
+
+@#for i in wg
+n@{i}=n@{i}_iss;
+n@{i}_f=n@{i}_f_iss;
+u@{i}=u@{i}_iss;
+u@{i}_f=u@{i}_f_iss;
+Omega@{i}=Omega@{i}_iss;
+Omega@{i}_f=Omega@{i}_f_iss;
+w@{i}=w@{i}_iss;
+w@{i}_f=w@{i}_f_iss;
+dWHN@{i}=dWHN@{i}_iss;
+dWFN@{i}=dWFN@{i}_iss;
+dWFN@{i}_f=dWFN@{i}_f_iss;
+eps_eta@{i}=eps_eta@{i}_iss;
+eta@{i}=eta@{i}b*eps_eta@{i};
+@#endfor
+
+@#for i in erg
+i@{i}=i@{i}_iss;
+lambda@{i}=lambda@{i}_iss;
+i@{i}_f=i@{i}_f_iss;
+lambda@{i}_f=lambda@{i}_f_iss;
+WE@{i}=0;
+eps_De_@{i}=eps_De_@{i}_iss;
+De_@{i}=De_@{i}b*eps_De_@{i}_iss;
+@#endfor
+
+@#for i in fwg
+i@{i}=0;
+lambda@{i}=0;
+i@{i}_f=0;
+lambda@{i}_f=0;
+@#endfor
+
+@#for i in ag
+@#if i in endg
+s@{i}=0;
+@#else
+s@{i}=s@{i}_iss;
+@#endif
+@#endfor
+
+@#for i in ag
+beta@{i}=beta@{i}_iss;
+beta@{i}_f=beta@{i}_f_iss;
+PD@{i}=PD@{i}_iss;
+c@{i}=c@{i}_iss;
+P@{i}=P@{i}_iss;
+P@{i}_f=P@{i}_f_iss;
+@#endfor
+
+wb = wb_iss;
+wb_f = wb_f_iss;
+Omega = Omega_iss;
+Omega_f = Omega_f_iss;
+Omega_hf = Omega_hf_iss;
+V = V_iss ;
+M = M_iss ;
+qq = qq_iss ;
+p = p_iss ;
+N = N_iss ;
+N_f = N_f_iss ;
+Q = Q_iss ;
+RR = RR_iss ;
+H = H_iss ;
+K = K_iss ;
+Y = Y_iss ;
+gdp = gdp_iss ;
+nx = nx_iss ;
+FH = FH_iss ;
+pi = pi_iss ;
+ct = ct_iss ;
+st = st_iss ;
+wshare = wshare_iss ;
+rr = rr_iss ;
+
+gamma = gamma_iss ;
+mc = mc_iss ;
+phii = phii_iss ;
+D = D_iss ;
+DH = DH_iss ;
+DF = DF_iss ;
+X = X_iss ;
+bs = bs_iss ;
+bsY = bsY_iss ;
+P00_f = P00_f_iss;
+
+eps_rhol=eps_rhol_iss;
+eps_rhoe=eps_rhoe_iss;
+eps_rhou=eps_rhou_iss;
+rhou=rhoub*eps_rhou_iss;
+rhoe=rhoeb*eps_rhoe_iss;
+rhol=rholb*eps_rhol_iss;
+eps_tauc=eps_tauc_iss;
+eps_tauk=eps_tauk_iss;
+eps_tauw=eps_tauw_iss;
+eps_tauf=eps_tauf_iss;
+tauw=tauwb*eps_tauw;
+tauc=taucb*eps_tauc;
+tauf=taufb*eps_tauf;
+tauk=taukb*eps_tauk;
+eps_theta=eps_theta_iss;
+eps_gh=eps_gh_iss;
+eps_TFP=eps_TFP_iss;
+eps_g=eps_g_iss;
+g=gb*eps_g_iss;
+TFP=TFPb*eps_TFP_iss;
+gh=ghb*eps_gh_iss;
+theta=thetab*eps_theta_iss;
+
+rrb=rrbb;
+tau1=tau1b;
+om1=om1b;
+om2=om2b;
+om2s=om2sb;
+
+eps_Ds=1;
+eps_phijs=1;
+Ds=Dsb*eps_Ds;
+phijs=phijsb*eps_phijs;
+
+eps_PensCorr_F=eps_PensCorr_F_iss;
+eps_PensCorr_L=eps_PensCorr_L_iss;
+PensCorr_F=eps_PensCorr_F_iss;
+PensCorr_L=eps_PensCorr_L_iss;
+
+P00 = P00_iss ;
+P00_foP00 = P00_foP00_iss ;
+
+DepRatio_n=
+@#for i in rg
++P@{i}
+@#endfor
+;
+DepRatio_d=
+@#for i in wg
++P@{i}
+@#endfor
+;
+
+DepRatio=DepRatio_n/DepRatio_d;
+
+ZARA=age_early+length_period*(
+@#for i in erg
++1-i@{i}
+@#endfor
+);
+
+Ptot=Ptot_iss;
+Ptot_f=Ptot_f_iss;
+sleep=sleep_iss;
+du=du_iss;
+de=de_iss;
+dl=dl_iss;
+
+inA=inA_iss;%(tauw+tauf)*(
+%@#for i in wg
+%+n@{i}*w@{i}*P@{i}+n@{i}_f*w@{i}_f*P@{i}_f
+%@#endfor
+%);
+
+inB=inB_iss;%tauk*rr*(
+%@#for i in nbg
+%+1/beta@{i}^ann*s@{i-1}*P@{i}
+%@#endfor
+%)/(1+gh);
+
+in=in_iss;%tauc*ct+inA+inB+sleep;
+NBR=NBR_iss;%g*phii*gdp+(du+de+dl)-(in);
+NBRY=NBR/(phii*gdp);
+NBR2=NBR;
+tauf2=tauf;
+tauw2=tauw;
+tauc2=tauc;
+
+end;
+
+%========================================================
+% compute initial steady state and check eigenvalues
+%========================================================
+
+resid;
+steady(solve_algo=3);
+check;
+
+%========================================================
+endval;
+%========================================================
+
+@#for i in wg
+n@{i}=n@{i}_fss;
+n@{i}_f=n@{i}_f_fss;
+u@{i}=u@{i}_fss;
+u@{i}_f=u@{i}_f_fss;
+Omega@{i}=Omega@{i}_fss;
+Omega@{i}_f=Omega@{i}_f_fss;
+w@{i}=w@{i}_fss;
+w@{i}_f=w@{i}_f_fss;
+dWHN@{i}=dWHN@{i}_fss;
+dWFN@{i}=dWFN@{i}_fss;
+dWFN@{i}_f=dWFN@{i}_f_fss;
+eps_eta@{i}=eps_eta@{i}_fss;
+eta@{i}=eta@{i}b*eps_eta@{i};
+@#endfor
+
+@#for i in erg
+i@{i}=i@{i}_fss;
+lambda@{i}=lambda@{i}_fss;
+i@{i}_f=i@{i}_f_fss;
+lambda@{i}_f=lambda@{i}_f_fss;
+WE@{i}=0;
+eps_De_@{i}=eps_De_@{i}_fss;
+De_@{i}=De_@{i}b*eps_De_@{i}_fss;
+@#endfor
+
+@#for i in fwg
+i@{i}=0;
+lambda@{i}=0;
+i@{i}_f=0;
+lambda@{i}_f=0;
+@#endfor
+
+@#for i in ag
+@#if i in endg
+s@{i}=0;
+@#else
+s@{i}=s@{i}_fss;
+@#endif
+@#endfor
+
+@#for i in ag
+beta@{i}=beta@{i}_fss;
+beta@{i}_f=beta@{i}_f_fss;
+PD@{i}=PD@{i}_fss;
+c@{i}=c@{i}_fss;
+P@{i}=P@{i}_fss;
+P@{i}_f=P@{i}_f_fss;
+@#endfor
+
+wb = wb_fss;
+wb_f = wb_f_fss;
+Omega = Omega_fss;
+Omega_f = Omega_f_fss;
+Omega_hf = Omega_hf_fss;
+V = V_fss ;
+M = M_fss ;
+qq = qq_fss ;
+p = p_fss ;
+N = N_fss ;
+N_f = N_f_fss ;
+Q = Q_fss ;
+RR = RR_fss ;
+H = H_fss ;
+K = K_fss ;
+Y = Y_fss ;
+gdp = gdp_fss ;
+nx = nx_fss ;
+FH = FH_fss ;
+pi = pi_fss ;
+ct = ct_fss ;
+st = st_fss ;
+wshare = wshare_fss ;
+rr = rr_fss ;
+
+gamma = gamma_fss ;
+mc = mc_fss ;
+phii = phii_fss ;
+D = D_fss ;
+DH = DH_fss ;
+DF = DF_fss ;
+X = X_fss ;
+bs = bs_fss ;
+bsY = bsY_fss ;
+P00_f = P00_f_fss;
+
+eps_rhol=eps_rhol_fss;
+eps_rhoe=eps_rhoe_fss;
+eps_rhou=eps_rhou_fss;
+rhou=rhoub*eps_rhou_fss;
+rhoe=rhoeb*eps_rhoe_fss;
+rhol=rholb*eps_rhol_fss;
+eps_tauc=eps_tauc_fss;
+eps_tauk=eps_tauk_fss;
+eps_tauw=eps_tauw_fss;
+eps_tauf=eps_tauf_fss;
+tauw=tauwb*eps_tauw;
+tauc=taucb*eps_tauc;
+tauf=taufb*eps_tauf;
+tauk=taukb*eps_tauk;
+eps_theta=eps_theta_fss;
+eps_gh=eps_gh_fss;
+eps_TFP=eps_TFP_fss;
+eps_g=eps_g_fss;
+g=gb*eps_g_fss;
+TFP=TFPb*eps_TFP_fss;
+gh=ghb*eps_gh_fss;
+theta=thetab*eps_theta_fss;
+
+rrb=rrbb;
+tau1=tau1b;
+om1=om1b;
+om2=om2b;
+om2s=om2sb;
+
+eps_Ds=1;
+eps_phijs=1;
+Ds=Dsb*eps_Ds;
+phijs=phijsb*eps_phijs;
+
+eps_PensCorr_F=eps_PensCorr_F_fss;
+eps_PensCorr_L=eps_PensCorr_L_fss;
+PensCorr_F=eps_PensCorr_F_fss;
+PensCorr_L=eps_PensCorr_L_fss;
+
+P00 = P00_fss ;
+P00_foP00 = P00_foP00_fss ;
+
+DepRatio_n=
+@#for i in rg
++P@{i}
+@#endfor
+;
+DepRatio_d=
+@#for i in wg
++P@{i}
+@#endfor
+;
+
+DepRatio=DepRatio_n/DepRatio_d;
+
+ZARA=age_early+length_period*(
+@#for i in erg
++1-i@{i}
+@#endfor
+);
+
+Ptot=
+@#for i in ag
++P@{i}
+@#endfor
+;
+Ptot_f=
+@#for i in ag
++P@{i}_f
+@#endfor
+;
+
+sleep=(1+rr)*(
+@#for i in nbg
++1/beta@{i}*(1-1/beta@{i}^(ann-1))*s@{i-1}*P@{i}
+@#endfor
+)/(1+gh);
+
+du=rhou*(
+@#for i in wg
++w@{i}*u@{i}*P@{i}
+@#endfor
+);
+
+de=rhoe*(
+@#for i in erg
++w@{i}*i@{i}*P@{i}+w@{i}_f*i@{i}_f*P@{i}_f
+@#endfor
+);
+
+dl=
+@#for i in rg
++rhol*wb*PensCorr_L*P@{i}+rhol*wb_f*(N_f/(N+N_f))*PensCorr_F*P@{i}_f
+@#endfor
+;
+
+inA=(tauw+tauf)*(
+@#for i in wg
++n@{i}*w@{i}*P@{i}+n@{i}_f*w@{i}_f*P@{i}_f
+@#endfor
+);
+
+inB=tauk*rr*(
+@#for i in nbg
++1/beta@{i}^ann*s@{i-1}*P@{i}
+@#endfor
+)/(1+gh);
+
+in=tauc*ct+inA+inB+sleep;
+NBR=g*phii*gdp+(du+de+dl)-(in);
+NBRY=NBR/(phii*gdp);
+NBR2=NBR;
+tauf2=tauf;
+tauw2=tauw;
+tauc2=tauc;
+
+end;
+
+%========================================================
+% compute final steady state and check eigenvalues
+%========================================================
+
+resid;
+steady(solve_algo=3);
+check;
+
+
+% ===================================================
+shocks;
+% ===================================================
+
+var P00;
+ periods 1:99;
+ values (se_P00);
+
+@#for i in nbg
+var beta@{i};
+ periods 1:99;
+ values (se_beta@{i});
+var beta@{i}_f;
+ periods 1:99;
+ values (se_beta@{i}_f);
+var PD@{i};
+ periods 1:99;
+ values (se_PD@{i});
+@#endfor
+
+var P00_foP00;
+ periods 1:99;
+ values (se_P00_foP00);
+
+var eps_g;
+ periods 1:99;
+ values (se_eps_g);
+
+var eps_PensCorr_F;
+ periods 1:99;
+ values (se_eps_PensCorr_F);
+
+var eps_PensCorr_L;
+ periods 1:99;
+ values (se_eps_PensCorr_L);
+
+end;
+
+% *******************************************
+% Numerical Simulation, Control Parameters
+% *******************************************
+
+perfect_foresight_setup(periods=125);
+perfect_foresight_solver(maxit=100);
+
+if ~oo_.deterministic_simulation.status
+ error('Perfect foresight simulation failed')
+end
+
+mfs0=load('lola_solve_one_boundary_results');
+
+if max(max(oo_.endo_simul-mfs0.oo_.endo_simul)) > options_.dynatol.x
+ error('Inconsistency with mfs=0')
+end
diff --git a/tests/deterministic_simulations/ramst_block_mfs1.mod b/tests/deterministic_simulations/ramst_block_mfs1.mod
new file mode 100644
index 0000000000000000000000000000000000000000..7b9017cfa79257db6efecb457eb67ae939492d84
--- /dev/null
+++ b/tests/deterministic_simulations/ramst_block_mfs1.mod
@@ -0,0 +1,49 @@
+/* This model has a solve forward simple block that contains a recursive variable (a)
+ and a feedback one (b).
+ Regression test for bug fixed in preprocessor@740ea833f6b4a93c260b32e62f4302483af54f7a */
+
+var c k a b;
+varexo x e u;
+
+parameters alph gam delt bet aa rho tau;
+alph=0.5;
+gam=0.5;
+delt=0.02;
+bet=0.05;
+aa=0.5;
+rho = 0.95;
+tau = 0.025;
+
+
+model(block, mfs=1);
+c + k - aa*x*k(-1)^alph - (1-delt)*k(-1);
+c^(-gam) - (1+bet)^(-1)*(aa*alph*x(+1)*k^(alph-1) + 1 - delt)*c(+1)^(-gam);
+a = tau*b + e;
+b = tau*a+rho*b(-1) + u;
+end;
+
+initval;
+x = 1;
+k = ((delt+bet)/(1.0*aa*alph))^(1/(alph-1));
+c = aa*k^alph-delt*k;
+end;
+
+steady;
+
+check;
+
+shocks;
+ var x;
+ periods 1;
+ values 1.2;
+ var u;
+ periods 1;
+ values 1;
+end;
+
+model_info;
+
+perfect_foresight_setup(periods=200);
+perfect_foresight_solver;
+
+rplot a;