diff --git a/preprocessor/ComputingTasks.cc b/preprocessor/ComputingTasks.cc
index 592d20dcc..1049840d3 100644
--- a/preprocessor/ComputingTasks.cc
+++ b/preprocessor/ComputingTasks.cc
@@ -994,3 +994,20 @@ WriteLatexStaticModelStatement::writeOutput(ostream &output, const string &basen
 {
   static_model.writeLatexFile(basename);
 }
+
+ShockDecompositionStatement::ShockDecompositionStatement(const SymbolList &symbol_list_arg,
+                                             const OptionsList &options_list_arg) :
+  symbol_list(symbol_list_arg),
+  options_list(options_list_arg)
+{
+}
+
+void
+ShockDecompositionStatement::writeOutput(ostream &output, const string &basename) const
+{
+  options_list.writeOutput(output);
+  symbol_list.writeOutput("var_list_", output);
+  output << "oo_ = shock_decomposition(M_,oo_,options_,var_list_);\n";
+}
+
+
diff --git a/preprocessor/ComputingTasks.hh b/preprocessor/ComputingTasks.hh
index 1810a699d..eca744d98 100644
--- a/preprocessor/ComputingTasks.hh
+++ b/preprocessor/ComputingTasks.hh
@@ -458,4 +458,15 @@ public:
   virtual void writeOutput(ostream &output, const string &basename) const;
 };
 
+class ShockDecompositionStatement : public Statement
+{
+private:
+  const SymbolList symbol_list;
+  const OptionsList options_list;
+public:
+  ShockDecompositionStatement(const SymbolList &symbol_list_arg,
+                         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 b868694b2..b15fb93f4 100644
--- a/preprocessor/DynareBison.yy
+++ b/preprocessor/DynareBison.yy
@@ -122,7 +122,7 @@ class ParsingDriver;
 %token SPARSE SPARSE_DLL STDERR STEADY STOCH_SIMUL
 %token TEX RAMSEY_POLICY PLANNER_DISCOUNT
 %token <string_val> TEX_NAME
-%token UNIFORM_PDF UNIT_ROOT_VARS USE_DLL
+%token UNIFORM_PDF UNIT_ROOT_VARS USE_DLL SHOCK_DECOMPOSITION LABELS
 %token VALUES VAR VAREXO VAREXO_DET VAROBS
 %token WRITE_LATEX_DYNAMIC_MODEL WRITE_LATEX_STATIC_MODEL
 %token XLS_SHEET XLS_RANGE
@@ -212,6 +212,7 @@ statement : parameters
           | identification
           | write_latex_dynamic_model
           | write_latex_static_model
+          | shock_decomposition
           ;
 
 dsample : DSAMPLE INT_NUMBER ';'
@@ -719,6 +720,24 @@ symbol_list_ext : symbol_list
                     driver.add_in_symbol_list(colon);
                   }
                 ;
+                     
+list_of_symbol_lists : symbol_list ';' NAME
+                       {
+                         string *semicolon = new string(";");
+			 driver.add_in_symbol_list(semicolon);
+			 driver.add_in_symbol_list($3);
+		       }
+                     | list_of_symbol_lists  NAME
+                       { driver.add_in_symbol_list($2); }
+                     | list_of_symbol_lists COMMA NAME
+                       { driver.add_in_symbol_list($3); }
+                     | list_of_symbol_lists ';' NAME
+                       {
+                         string *semicolon = new string(";");
+			 driver.add_in_symbol_list(semicolon);
+			 driver.add_in_symbol_list($3);
+		       }
+                     ;
 
 signed_integer : PLUS INT_NUMBER
                  { $$ = $2; }
@@ -1169,6 +1188,16 @@ write_latex_static_model : WRITE_LATEX_STATIC_MODEL ';'
                            { driver.write_latex_static_model(); }
                          ;
 
+shock_decomposition : SHOCK_DECOMPOSITION ';'
+                      {driver.shock_decomposition(); }
+                    | SHOCK_DECOMPOSITION '(' shock_decomposition_options_list ')' ';'
+                      { driver.shock_decomposition(); }
+                    | SHOCK_DECOMPOSITION symbol_list ';'
+                      { driver.shock_decomposition(); }
+                    | SHOCK_DECOMPOSITION '(' shock_decomposition_options_list ')' symbol_list ';'
+                      { driver.shock_decomposition(); }
+                    ;
+
 bvar_prior_option : o_bvar_prior_tau
                   | o_bvar_prior_decay
                   | o_bvar_prior_lambda
@@ -1269,6 +1298,14 @@ dynare_sensitivity_option : o_gsa_identification
                           | o_gsa_trans_ident
                           ;
 
+shock_decomposition_options_list : shock_decomposition_option COMMA shock_decomposition_options_list
+                                 | shock_decomposition_option
+                                 ;
+
+shock_decomposition_option : o_parameters
+                           | o_shocks
+                           | o_labels
+                           ;
 
 homotopy_setup: HOMOTOPY_SETUP ';' homotopy_list END
                { driver.end_homotopy();};
@@ -1436,6 +1473,10 @@ o_gsa_trans_ident : TRANS_IDENT EQUAL INT_NUMBER { driver.option_num("trans_iden
 o_homotopy_mode : HOMOTOPY_MODE EQUAL INT_NUMBER {driver.option_num("homotopy_mode",$3); };
 o_homotopy_steps : HOMOTOPY_STEPS EQUAL INT_NUMBER {driver.option_num("homotopy_steps",$3); };
 o_block_mfs : BLOCK_MFS { driver.option_num("block_mfs", "1"); }
+o_parameters : PARAMETERS EQUAL NAME {driver.option_str("parameters",$3);};
+o_shocks : SHOCKS EQUAL '(' list_of_symbol_lists ')' { driver.option_symbol_list("shocks"); };
+o_labels : LABELS EQUAL '(' symbol_list ')' { driver.option_symbol_list("labels"); };
+
 
 range : NAME ':' NAME
         {
diff --git a/preprocessor/DynareFlex.ll b/preprocessor/DynareFlex.ll
index 013e116ff..5ee0ecdc0 100644
--- a/preprocessor/DynareFlex.ll
+++ b/preprocessor/DynareFlex.ll
@@ -135,6 +135,7 @@ int sigma_e = 0;
 <INITIAL>dynare_sensitivity {BEGIN DYNARE_STATEMENT; return token::DYNARE_SENSITIVITY;}
 <INITIAL>initval_file {BEGIN DYNARE_STATEMENT; return token::INITVAL_FILE;}
 <INITIAL>forecast {BEGIN DYNARE_STATEMENT; return token::FORECAST;}
+<INITIAL>shock_decomposition {BEGIN DYNARE_STATEMENT; return token::SHOCK_DECOMPOSITION;}
  /* End of a Dynare statement */
 
 <DYNARE_STATEMENT>; {
@@ -282,7 +283,7 @@ int sigma_e = 0;
 <DYNARE_STATEMENT>xls_range {return token::XLS_RANGE;}
 <DYNARE_STATEMENT>mh_recover {return token::MH_RECOVER;}
 <DYNARE_STATEMENT>planner_discount {return token::PLANNER_DISCOUNT;}
-
+<DYNARE_STATEMENT>labels {return token::LABELS;}
 
 <DYNARE_STATEMENT>[\.] {return Dynare::parser::token_type (yytext[0]);}
 <DYNARE_STATEMENT>[\\] {return Dynare::parser::token_type (yytext[0]);}
diff --git a/preprocessor/ParsingDriver.cc b/preprocessor/ParsingDriver.cc
index 7041a685f..ec46f99bc 100644
--- a/preprocessor/ParsingDriver.cc
+++ b/preprocessor/ParsingDriver.cc
@@ -1071,6 +1071,15 @@ ParsingDriver::bvar_forecast(string *nlags)
   delete nlags;
 }
 
+void 
+ParsingDriver::shock_decomposition()
+{
+  mod_file->addStatement(new ShockDecompositionStatement(symbol_list, options_list));
+  symbol_list.clear();
+  options_list.clear();
+}
+  
+
 NodeID
 ParsingDriver::add_model_equal(NodeID arg1, NodeID arg2)
 {
diff --git a/preprocessor/ParsingDriver.hh b/preprocessor/ParsingDriver.hh
index 6f90c5174..399b8a24c 100644
--- a/preprocessor/ParsingDriver.hh
+++ b/preprocessor/ParsingDriver.hh
@@ -350,6 +350,8 @@ public:
   void bvar_density(string *maxnlags);
   //! BVAR forecast
   void bvar_forecast(string *nlags);
+  //! Shock decomposition
+  void shock_decomposition();
   //! Writes token "arg1=arg2" to model tree
   NodeID add_model_equal(NodeID arg1, NodeID arg2);
   //! Writes token "arg=0" to model tree