diff --git a/matlab/method_of_moments/method_of_moments_objective_function.m b/matlab/method_of_moments/method_of_moments_objective_function.m
index 76eacd162..745f8570e 100644
--- a/matlab/method_of_moments/method_of_moments_objective_function.m
+++ b/matlab/method_of_moments/method_of_moments_objective_function.m
@@ -232,7 +232,7 @@ elseif strcmp(options_mom_.mom.mom_method,'SMM')
         i_ME = setdiff([1:size(M_.H,1)],find(diag(M_.H) == 0)); % find ME with 0 variance
         chol_S = chol(M_.H(i_ME,i_ME)); %decompose rest
         shock_mat=zeros(size(options_mom_.mom.ME_shock_series)); %initialize
-        shock_mat(:,i_ME)=options_mom_.mom.ME_shock_series(:,i_exo_var)*chol_S;
+        shock_mat(:,i_ME)=options_mom_.mom.ME_shock_series(:,i_ME)*chol_S;
         y_sim = y_sim+shock_mat;
     end