diff --git a/tests/Makefile.am b/tests/Makefile.am
index e28ed34a0..76e091856 100644
--- a/tests/Makefile.am
+++ b/tests/Makefile.am
@@ -84,6 +84,7 @@ MODFILES = \
 	optimal_policy/Ramsey/ramsey_ex.mod \
 	optimal_policy/Ramsey/ramsey_ex_initval_AR2.mod \
 	optimal_policy/Ramsey/ramsey_ex_aux.mod \
+	optimal_policy/Ramsey/ramsey_histval.mod \
 	optimal_policy/Ramsey/Gali_commitment.mod \
 	optimal_policy/RamseyConstraints/test1.mod \
 	discretionary_policy/dennis_1.mod \
@@ -356,6 +357,7 @@ XFAIL_MODFILES = ramst_xfail.mod \
 	estimation/fs2000_stochastic_singularity_xfail.mod \
 	identification/ident_unit_root/ident_unit_root_xfail.mod \
 	steady_state/Linear_steady_state_xfail.mod \
+	optimal_policy/Ramsey/ramsey_histval_xfail.mod \
 	example1_extra_exo_xfail.mod
 
 MFILES = initval_file/ramst_initval_file_data.m
diff --git a/tests/optimal_policy/Ramsey/ramsey_histval.mod b/tests/optimal_policy/Ramsey/ramsey_histval.mod
new file mode 100644
index 000000000..bb9cdb0f8
--- /dev/null
+++ b/tests/optimal_policy/Ramsey/ramsey_histval.mod
@@ -0,0 +1,44 @@
+% Test whether preprocessor recognizes state variables introduced by optimal policy Github #1193
+        
+var pai, c, n, r, a;
+varexo u;
+parameters beta, rho, epsilon, omega, phi, gamma;
+
+beta=0.99;
+gamma=3;
+omega=17;
+epsilon=8;
+phi=1;
+rho=0.95;
+
+model;
+a = rho*a(-1)+u;
+1/c = beta*r/(c(+1)*pai(+1));
+pai*(pai-1)/c = beta*pai(+1)*(pai(+1)-1)/c(+1)+epsilon*phi*n^(gamma+1)/omega -exp(a)*n*(epsilon-1)/(omega*c);
+exp(a)*n = c+(omega/2)*(pai-1)^2;
+end;
+
+initval;
+r=1;
+end;
+
+histval;
+r(0)=1;
+end;
+
+steady_state_model;
+a = 0;
+pai = beta*r;
+c = find_c(0.96,pai,beta,epsilon,phi,gamma,omega);
+n = c+(omega/2)*(pai-1)^2;
+end;
+
+shocks;
+var u; stderr 0.008;
+var u;
+periods 1;
+values 1;
+end;
+options_.dr_display_tol=0;
+planner_objective(ln(c)-phi*((n^(1+gamma))/(1+gamma)));
+ramsey_policy(planner_discount=0.99,order=1,instruments=(r),periods=500);
\ No newline at end of file
diff --git a/tests/optimal_policy/Ramsey/ramsey_histval_xfail.mod b/tests/optimal_policy/Ramsey/ramsey_histval_xfail.mod
new file mode 100644
index 000000000..0af81202d
--- /dev/null
+++ b/tests/optimal_policy/Ramsey/ramsey_histval_xfail.mod
@@ -0,0 +1,44 @@
+% Test whether preprocessor fails if histval set future lags
+        
+var pai, c, n, r, a;
+varexo u;
+parameters beta, rho, epsilon, omega, phi, gamma;
+
+beta=0.99;
+gamma=3;
+omega=17;
+epsilon=8;
+phi=1;
+rho=0.95;
+
+model;
+a = rho*a(-1)+u;
+1/c = beta*r/(c(+1)*pai(+1));
+pai*(pai-1)/c = beta*pai(+1)*(pai(+1)-1)/c(+1)+epsilon*phi*n^(gamma+1)/omega -exp(a)*n*(epsilon-1)/(omega*c);
+exp(a)*n = c+(omega/2)*(pai-1)^2;
+end;
+
+initval;
+r=1;
+end;
+
+histval;
+a(5)=1;
+end;
+
+steady_state_model;
+a = 0;
+pai = beta*r;
+c = find_c(0.96,pai,beta,epsilon,phi,gamma,omega);
+n = c+(omega/2)*(pai-1)^2;
+end;
+
+shocks;
+var u; stderr 0.008;
+var u;
+periods 1;
+values 1;
+end;
+options_.dr_display_tol=0;
+planner_objective(ln(c)-phi*((n^(1+gamma))/(1+gamma)));
+ramsey_policy(planner_discount=0.99,order=1,instruments=(r),periods=500);
\ No newline at end of file