diff --git a/preprocessor/ComputingTasks.cc b/preprocessor/ComputingTasks.cc
index 7bb76ad0a..d33a42d14 100644
--- a/preprocessor/ComputingTasks.cc
+++ b/preprocessor/ComputingTasks.cc
@@ -1141,3 +1141,43 @@ SvarIdentificationStatement::writeOutput(ostream &output, const string &basename
         }
     }
 }
+
+MarkovSwitchingStatement::MarkovSwitchingStatement(const OptionsList &options_list_arg) :
+  options_list(options_list_arg)
+{
+}
+
+void
+MarkovSwitchingStatement::writeOutput(ostream &output, const string &basename) const
+{
+  OptionsList::num_options_type::const_iterator itChain, itState, itNOS, itDuration;
+
+  itChain = options_list.num_options.find("ms.chain");
+  if (itChain == options_list.num_options.end())
+    {
+      cerr << "MarkovSwitchingStatement::writeOutput() Should not arrive here (1). Please report this to the Dynare Team." << endl;
+      exit(EXIT_FAILURE);
+    }
+
+  itDuration = options_list.num_options.find("ms.duration");
+  if (itDuration == options_list.num_options.end())
+    {
+      cerr << "MarkovSwitchingStatement::writeOutput() Should not arrive here (2). Please report this to the Dynare Team." << endl;
+      exit(EXIT_FAILURE);
+    }
+
+  itState = options_list.num_options.find("ms.state");
+  itNOS = options_list.num_options.find("ms.number_of_states");
+  if (itState != options_list.num_options.end() &&
+      itNOS == options_list.num_options.end())
+    output << "options_.ms.ms_chain(" << itChain->second << ").state(" << itState->second << ").duration = " << itDuration->second << ";" << endl;
+  else if (itState == options_list.num_options.end() &&
+           itNOS != options_list.num_options.end())
+    for (int i=0; i<atoi(itNOS->second.c_str()); i++)
+      output << "options_.ms.ms_chain(" << itChain->second << ").state(" << i+1 << ").duration = " << itDuration->second << ";" << endl;
+  else
+    {
+      cerr << "MarkovSwitchingStatement::writeOutput() Should not arrive here (3). Please report this to the Dynare Team." << endl;
+      exit(EXIT_FAILURE);
+    }
+}
diff --git a/preprocessor/ComputingTasks.hh b/preprocessor/ComputingTasks.hh
index afd27fa43..1c59323fb 100644
--- a/preprocessor/ComputingTasks.hh
+++ b/preprocessor/ComputingTasks.hh
@@ -508,4 +508,13 @@ public:
   virtual void writeOutput(ostream &output, const string &basename) const;
 };
 
+class MarkovSwitchingStatement : public Statement
+{
+private:
+  const OptionsList options_list;
+public:
+  MarkovSwitchingStatement(const OptionsList &options_list_arg);
+  virtual void writeOutput(ostream &output, const string &basename) const;
+};
+
 #endif
diff --git a/preprocessor/DynareBison.yy b/preprocessor/DynareBison.yy
index 36ec425c7..75feeb27a 100644
--- a/preprocessor/DynareBison.yy
+++ b/preprocessor/DynareBison.yy
@@ -629,7 +629,7 @@ svar_var_list : svar_var_list COMMA symbol
               ;
 
 markov_switching : MARKOV_SWITCHING '(' ms_options_list ')' ';'
-                   { ;}
+                   { driver.markov_switching(); }
                  ;
 
 ms_options_list : ms_options_list COMMA ms_options
@@ -1859,14 +1859,14 @@ o_draws_nbr_modified_harmonic_mean : DRAWS_NBR_MODIFIED_HARMONIC_MEAN EQUAL INT_
 o_dirichlet_scale : DIRICHLET_SCALE EQUAL INT_NUMBER {driver.option_num("ms.dirichlet_scale",$3); };
 o_k_order_solver : K_ORDER_SOLVER {driver.option_num("k_order_solver","1"); };
 
-o_chain : CHAIN EQUAL INT_NUMBER {  ;};
-o_state : STATE EQUAL INT_NUMBER {  ;};
+o_chain : CHAIN EQUAL INT_NUMBER { driver.option_num("ms.chain",$3); };
+o_state : STATE EQUAL INT_NUMBER { driver.option_num("ms.state",$3); };
 o_duration : DURATION EQUAL number
-             {  ;}
+             { driver.option_num("ms.duration",$3); }
            | DURATION EQUAL INF_CONSTANT
-             {  ;}
+             { driver.option_num("ms.duration","Inf"); }
            ;
-o_number_of_states : NUMBER_OF_STATES EQUAL INT_NUMBER {  ;};
+o_number_of_states : NUMBER_OF_STATES EQUAL INT_NUMBER { driver.option_num("ms.number_of_states",$3); };
 o_coefficients : COEFFICIENTS { ;};
 o_variances : VARIANCES { ;};
 o_constants : CONSTANTS { ;};
diff --git a/preprocessor/ParsingDriver.cc b/preprocessor/ParsingDriver.cc
index ebed17e6f..bc754ff3e 100644
--- a/preprocessor/ParsingDriver.cc
+++ b/preprocessor/ParsingDriver.cc
@@ -1194,6 +1194,47 @@ ParsingDriver::ms_sbvar()
   options_list.clear();
 }
 
+void
+ParsingDriver::markov_switching()
+{
+  OptionsList::num_options_type::const_iterator it0, it1;
+
+  it0 = options_list.num_options.find("ms.chain");
+  if (it0 == options_list.num_options.end())
+    error("A chain option must be passed to the markov_switching statement.");
+  else if (atoi(it0->second.c_str()) <= 0)
+    error("The value passed to the chain option must be greater than zero.");
+
+  it0=options_list.num_options.find("ms.state");
+  it1=options_list.num_options.find("ms.number_of_states");
+  if ((it0 == options_list.num_options.end()) &&
+      (it1 == options_list.num_options.end()))
+    error("Either a state option or a number_of_states option must be passed to the markov_switching statement.");
+
+  if ((it0 != options_list.num_options.end()) &&
+      (it1 != options_list.num_options.end()))
+    error("You cannot pass both a state option and a number_of_states option to the markov_switching statement.");
+
+  if (it0 != options_list.num_options.end())
+    if (atoi(it0->second.c_str()) <= 0)
+      error("The value passed to the state option must be greater than zero.");
+
+  if (it1 != options_list.num_options.end())
+    if (atoi(it1->second.c_str()) <= 0)
+      error("The value passed to the number_of_states option must be greater than zero.");
+
+  string infStr ("Inf");
+  it0 = options_list.num_options.find("ms.duration");
+  if (it0 == options_list.num_options.end())
+    error("A duration option must be passed to the markov_switching statement.");
+  else if (infStr.compare(it0->second) != 0)
+    if (atof(it0->second.c_str()) <= 0.0)
+      error("The value passed to the duration option must be greater than zero.");
+
+  mod_file->addStatement(new MarkovSwitchingStatement(options_list));
+  options_list.clear();
+}
+
 void
 ParsingDriver::shock_decomposition()
 {
diff --git a/preprocessor/ParsingDriver.hh b/preprocessor/ParsingDriver.hh
index 4dc42a944..a9d3253b5 100644
--- a/preprocessor/ParsingDriver.hh
+++ b/preprocessor/ParsingDriver.hh
@@ -371,6 +371,8 @@ public:
   void sbvar();
   //! MS_SBVAR statement
   void ms_sbvar();
+  //! MarkovSwitching statement
+  void markov_switching();
   //! Shock decomposition
   void shock_decomposition();
   //! Conditional forecast statement