diff --git a/matlab/perfect-foresight-models/sim1.m b/matlab/perfect-foresight-models/sim1.m
index 56da30eadb17d351ef25addf3f84a1935dbab33f..71eb06001c3ebef3f84f585c5241d0c82fc7676b 100644
--- a/matlab/perfect-foresight-models/sim1.m
+++ b/matlab/perfect-foresight-models/sim1.m
@@ -81,6 +81,10 @@ res = zeros(periods*ny,1);
 
 o_periods = periods;
 
+if endogenous_terminal_period
+    ZERO = zeros(length(i_upd),1);
+end
+
 h1 = clock ;
 iA = zeros(periods*M.NNZDerivatives(1),3);
 for iter = 1:options.simul.maxit