diff --git a/src/DynamicModel.cc b/src/DynamicModel.cc
index 5e38925f..894928cb 100644
--- a/src/DynamicModel.cc
+++ b/src/DynamicModel.cc
@@ -3334,6 +3334,24 @@ DynamicModel::getVarModelVariablesFromEqTags(vector<string> &var_model_eqtags,
     }
 }
 
+void
+DynamicModel::checkVarMinLag(vector<int> &eqnumber) const
+{
+  int eqn = 1;
+  for (vector<int>::const_iterator it = eqnumber.begin();
+       it != eqnumber.end(); it++, eqn++)
+    {
+      int min_lag = -1;
+      min_lag = equations[*it]->get_arg2()->VarMinLag();
+      if (min_lag <= 0)
+        {
+          cerr << "ERROR in VAR Equation #" << eqn << ". "
+               << "Leaded exogenous variables and leaded or contemporaneous endogenous variables not allowed in VAR";
+          exit(EXIT_FAILURE);
+        }
+    }
+}
+
 int
 DynamicModel::getVarMaxLag(StaticModel &static_model, vector<int> &eqnumber) const
 {
diff --git a/src/DynamicModel.hh b/src/DynamicModel.hh
index bd56dc8e..ee9f981c 100644
--- a/src/DynamicModel.hh
+++ b/src/DynamicModel.hh
@@ -294,6 +294,9 @@ public:
                                       vector<set<pair<int, int> > > &rhs,
                                       vector<bool> &nonstationary) const;
 
+  //! Returns the max lag of the VAR
+  void checkVarMinLag(vector<int> &eqnumber) const;
+
   //! Returns the max lag of the VAR
   int getVarMaxLag(StaticModel &static_model, vector<int> &eqnumber) const;
 
diff --git a/src/ExprNode.cc b/src/ExprNode.cc
index c4812ebd..f6018f93 100644
--- a/src/ExprNode.cc
+++ b/src/ExprNode.cc
@@ -468,6 +468,12 @@ NumConstNode::undiff() const
   return const_cast<NumConstNode *>(this);
 }
 
+int
+NumConstNode::VarMinLag() const
+{
+  return 1;
+}
+
 void
 NumConstNode::VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const
 {
@@ -1342,6 +1348,25 @@ VariableNode::maxLead() const
     }
 }
 
+int
+VariableNode::VarMinLag() const
+{
+  switch (type)
+    {
+    case eEndogenous:
+      return -lag;
+    case eExogenous:
+      if (lag > 0)
+        return -lag;
+      else
+        return 1; // Can have contemporaneus exog in VAR
+    case eModelLocalVariable:
+      return datatree.local_variables_table[symb_id]->VarMinLag();
+    default:
+      return 1;
+    }
+}
+
 int
 VariableNode::maxLag() const
 {
@@ -2934,6 +2959,12 @@ UnaryOpNode::VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &
     }
 }
 
+int
+UnaryOpNode::VarMinLag() const
+{
+  return arg->VarMinLag();
+}
+
 int
 UnaryOpNode::PacMaxLag(vector<int> &lhs) const
 {
@@ -4252,6 +4283,12 @@ BinaryOpNode::compileExternalFunctionOutput(ostream &CompileCode, unsigned int &
                                       dynamic, steady_dynamic, tef_terms);
 }
 
+int
+BinaryOpNode::VarMinLag() const
+{
+  return min(arg1->VarMinLag(), arg2->VarMinLag());
+}
+
 void
 BinaryOpNode::VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const
 {
@@ -5615,6 +5652,12 @@ TrinaryOpNode::undiff() const
   return buildSimilarTrinaryOpNode(arg1subst, arg2subst, arg3subst, datatree);
 }
 
+int
+TrinaryOpNode::VarMinLag() const
+{
+  return min(min(arg1->VarMinLag(), arg2->VarMinLag()), arg3->VarMinLag());
+}
+
 void
 TrinaryOpNode::VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const
 {
@@ -6039,6 +6082,16 @@ AbstractExternalFunctionNode::undiff() const
   return buildSimilarExternalFunctionNode(arguments_subst, datatree);
 }
 
+int
+AbstractExternalFunctionNode::VarMinLag() const
+{
+int val = 0;
+  for (vector<expr_t>::const_iterator it = arguments.begin();
+       it != arguments.end(); it++)
+    val = min(val, (*it)->VarMinLag());
+  return val;
+}
+
 void
 AbstractExternalFunctionNode::VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const
 {
@@ -7555,6 +7608,12 @@ VarExpectationNode::undiff() const
   return const_cast<VarExpectationNode *>(this);
 }
 
+int
+VarExpectationNode::VarMinLag() const
+{
+  return 1;
+}
+
 void
 VarExpectationNode::VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const
 {
@@ -7984,6 +8043,12 @@ PacExpectationNode::undiff() const
   return const_cast<PacExpectationNode *>(this);
 }
 
+int
+PacExpectationNode::VarMinLag() const
+{
+  return 1;
+}
+
 void
 PacExpectationNode::VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const
 {
diff --git a/src/ExprNode.hh b/src/ExprNode.hh
index 59f4ebcb..f1c1772f 100644
--- a/src/ExprNode.hh
+++ b/src/ExprNode.hh
@@ -264,6 +264,9 @@ class ExprNode
       */
       virtual void collectDynamicVariables(SymbolType type_arg, set<pair<int, int> > &result) const = 0;
 
+      //! Find lowest lag for VAR
+      virtual int VarMinLag() const = 0;
+
       //! Find the maximum lag in a VAR: handles case where LHS is diff
       virtual void VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const = 0;
 
@@ -569,6 +572,7 @@ public:
   virtual int maxExoLag() const;
   virtual int maxLead() const;
   virtual int maxLag() const;
+  virtual int VarMinLag() const;
   virtual void VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const;
   virtual int PacMaxLag(vector<int> &lhs) const;
   virtual expr_t undiff() const;
@@ -656,6 +660,7 @@ public:
   virtual int maxExoLag() const;
   virtual int maxLead() const;
   virtual int maxLag() const;
+  virtual int VarMinLag() const;
   virtual void VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const;
   virtual int PacMaxLag(vector<int> &lhs) const;
   virtual expr_t undiff() const;
@@ -763,6 +768,7 @@ public:
   virtual int maxExoLag() const;
   virtual int maxLead() const;
   virtual int maxLag() const;
+  virtual int VarMinLag() const;
   virtual void VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const;
   virtual int PacMaxLag(vector<int> &lhs) const;
   virtual expr_t undiff() const;
@@ -890,6 +896,7 @@ public:
   virtual int maxExoLag() const;
   virtual int maxLead() const;
   virtual int maxLag() const;
+  virtual int VarMinLag() const;
   virtual void VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const;
   virtual int PacMaxLag(vector<int> &lhs) const;
   virtual expr_t undiff() const;
@@ -992,6 +999,7 @@ public:
   virtual int maxExoLag() const;
   virtual int maxLead() const;
   virtual int maxLag() const;
+  virtual int VarMinLag() const;
   virtual void VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const;
   virtual int PacMaxLag(vector<int> &lhs) const;
   virtual expr_t undiff() const;
@@ -1096,6 +1104,7 @@ public:
   virtual int maxExoLag() const;
   virtual int maxLead() const;
   virtual int maxLag() const;
+  virtual int VarMinLag() const;
   virtual void VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const;
   virtual int PacMaxLag(vector<int> &lhs) const;
   virtual expr_t undiff() const;
@@ -1282,6 +1291,7 @@ public:
   virtual int maxExoLag() const;
   virtual int maxLead() const;
   virtual int maxLag() const;
+  virtual int VarMinLag() const;
   virtual void VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const;
   virtual int PacMaxLag(vector<int> &lhs) const;
   virtual expr_t undiff() const;
@@ -1364,6 +1374,7 @@ public:
   virtual int maxExoLag() const;
   virtual int maxLead() const;
   virtual int maxLag() const;
+  virtual int VarMinLag() const;
   virtual void VarMaxLag(DataTree &static_datatree, set<expr_t> &static_lhs, int &max_lag) const;
   virtual int PacMaxLag(vector<int> &lhs) const;
   virtual expr_t undiff() const;
diff --git a/src/ModFile.cc b/src/ModFile.cc
index 65e7fbfe..0ad90e61 100644
--- a/src/ModFile.cc
+++ b/src/ModFile.cc
@@ -392,6 +392,7 @@ ModFile::transformPass(bool nostrict, bool stochastic, bool compute_xrefs, const
           vector<string> eqtags = var_model_eq_tags[var_model_name];
           dynamic_model.getVarModelVariablesFromEqTags(eqtags,
                                                        eqnumber, lhs, lhs_expr_t, rhs, nonstationary);
+          original_model.checkVarMinLag(eqnumber);
           int max_lag = original_model.getVarMaxLag(diff_static_model, eqnumber);
           original_model.getVarLhsDiffAndInfo(eqnumber, diff, orig_diff_var);
           vms->fillVarModelInfoFromEquations(eqnumber, lhs, rhs, nonstationary,