Added comments to the example mod file.

Also moved some variable/parameter declarations.

tests/example1_model_block_declared_vars.mod

-// Example 1 from Collard's guide to Dynare
-var c, a, h, b;
-
-verbatim;
-% I want these comments included in
-% example1.m 1999q1 1999y
-%
-var = 1;
-end;
+// Declaration of some endogenous variables.
+var c;
+
+/*
+** REMARKS
+**
+** Some declarations for the endogenous variables are missing. They are declared below in
+** the model block.
+**
+*/
 
+// Declaration of some of the parameters.
 parameters beta, rho, theta, psi, tau;
 
 rho   = 0.95;
@@ -15,19 +17,51 @@ tau   = 0.025;
 beta  = 0.99;
 psi   = 0;
 theta = 2.95;
-
 phi   = 0.1;
 
+/*
+** REMARKS
+**
+** Same remark, some parameters are defined in the below in the model block (alpha and delta). These
+** variables must be calibrated after the model block (ie after the calibration).
+**
+** We do not declare the exogenous variables in the preamble. The innovations are decalred in the model
+** block below.
+**
+*/
+
 model;
-c*theta*h^(1+psi)=(1-alpha)*y;
-k|e = beta*(((exp(b)*c)/(exp(b(+1))*c(+1)))
+c*theta*h|e^(1+psi)=(1-alpha)*y;
+k = beta*(((exp(b)*c)/(exp(b(+1))*c(+1)))
     *(exp(b(+1))*alpha|p*y(+1)+(1-delta)*k));
 y|e = exp(a)*(k(-1)^alpha)*(h^(1-alpha));
-k = exp(b)*(y-c)+(1-delta|p)*k(-1);
-a = rho*a(-1)+tau*b(-1) + e|x;
-b = tau*a(-1)+rho*b(-1) + u|x;
+k|e = exp(b)*(y-c)+(1-delta|p)*k(-1);
+a|e = rho*a(-1) + e|x;
+b|e = rho*b(-1) + u|x;
 end;
 
+/*
+** REMARKS
+**
+** On the fly declaration works as follows:
+**
+**  - A symbol followed by |e implicitely declares an endogenous variable.
+**  - A symbol followed by |x implicitely declares an exogenous variable.
+**  - A symbol followed by |p implicitely declares a parameter.
+**
+** A parameter declared on the fly has to be calibrated after its declaration, ie after the model
+** block. If the user tries to give a value to a parameter before its declaration, then Dynare
+** interpret the calibration as a matlab statement, because Dynare doesn't know that the symbol is
+** a parameter.
+**
+** By default an undeclared symbol is interpreted as an exogenous variable. Consequently, if the user
+** removes an equation where an endogenous variable is declared, the status of the variable changes.
+** For instance, if one comments the last equation, the law of motion of b, symbol b becomes an
+** exogenous variable (whose value is zero by default). A more interesting use case, is to remove
+** the first equation, the arbitrage condition between leisure and consumption. Labour supply is
+** then supposed to be exogenous.
+*/
+
 alpha = 0.36;
 delta = 0.025;
 
@@ -43,9 +77,9 @@ u = 0;
 end;
 
 shocks;
-var e; stderr 0.009;
-var u; stderr 0.009;
-var e, u = phi*0.009*0.009;
+  var e; stderr 0.009;
+  var u; stderr 0.009;
+  var e, u = phi*0.009*0.009;
 end;
 
-stoch_simul;
+stoch_simul(order=1);