diff --git a/DynamicModel.cc b/DynamicModel.cc
index f6a54358..615d0232 100644
--- a/DynamicModel.cc
+++ b/DynamicModel.cc
@@ -3384,11 +3384,12 @@ DynamicModel::addEquationsForVar(map<string, pair<SymbolList, int> > &var_model_
 
 void
 DynamicModel::fillPacExpectationVarInfo(string &var_model_name,
+                                        vector<int> &lhs,
                                         map<int, set<int > > &rhs,
                                         vector<bool> &nonstationary)
 {
   for (size_t i = 0; i < equations.size(); i++)
-    equations[i]->fillPacExpectationVarInfo(var_model_name, rhs, nonstationary);
+    equations[i]->fillPacExpectationVarInfo(var_model_name, lhs, rhs, nonstationary);
 }
 
 void
diff --git a/DynamicModel.hh b/DynamicModel.hh
index d87b412b..598a5c68 100644
--- a/DynamicModel.hh
+++ b/DynamicModel.hh
@@ -299,6 +299,7 @@ public:
   void addEquationsForVar(map<string, pair<SymbolList, int> > &var_model_info);
   //! Add var_model info to pac_expectation nodes
   void fillPacExpectationVarInfo(string &var_model_name,
+                                 vector<int> &lhs,
                                  map<int, set<int > > &rhs,
                                  vector<bool> &nonstationary);
   //! Substitutes pac_expectation operator
diff --git a/ExprNode.cc b/ExprNode.cc
index e2dbba7e..effec690 100644
--- a/ExprNode.cc
+++ b/ExprNode.cc
@@ -579,7 +579,7 @@ NumConstNode::setVarExpectationIndex(map<string, pair<SymbolList, int> > &var_mo
 }
 
 void
-NumConstNode::fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
+NumConstNode::fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
 {
 }
 
@@ -1635,7 +1635,7 @@ VariableNode::setVarExpectationIndex(map<string, pair<SymbolList, int> > &var_mo
 }
 
 void
-VariableNode::fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
+VariableNode::fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
 {
 }
 
@@ -3032,9 +3032,9 @@ UnaryOpNode::setVarExpectationIndex(map<string, pair<SymbolList, int> > &var_mod
 }
 
 void
-UnaryOpNode::fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
+UnaryOpNode::fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
 {
-  arg->fillPacExpectationVarInfo(var_model_name, rhs_arg, nonstationary_arg);
+  arg->fillPacExpectationVarInfo(var_model_name_arg, lhs_arg, rhs_arg, nonstationary_arg);
 }
 
 bool
@@ -4568,10 +4568,10 @@ BinaryOpNode::setVarExpectationIndex(map<string, pair<SymbolList, int> > &var_mo
 }
 
 void
-BinaryOpNode::fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
+BinaryOpNode::fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
 {
-  arg1->fillPacExpectationVarInfo(var_model_name, rhs_arg, nonstationary_arg);
-  arg2->fillPacExpectationVarInfo(var_model_name, rhs_arg, nonstationary_arg);
+  arg1->fillPacExpectationVarInfo(var_model_name_arg, lhs_arg, rhs_arg, nonstationary_arg);
+  arg2->fillPacExpectationVarInfo(var_model_name_arg, lhs_arg, rhs_arg, nonstationary_arg);
 }
 
 bool
@@ -5344,11 +5344,11 @@ TrinaryOpNode::setVarExpectationIndex(map<string, pair<SymbolList, int> > &var_m
 }
 
 void
-TrinaryOpNode::fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
+TrinaryOpNode::fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
 {
-  arg1->fillPacExpectationVarInfo(var_model_name, rhs_arg, nonstationary_arg);
-  arg2->fillPacExpectationVarInfo(var_model_name, rhs_arg, nonstationary_arg);
-  arg3->fillPacExpectationVarInfo(var_model_name, rhs_arg, nonstationary_arg);
+  arg1->fillPacExpectationVarInfo(var_model_name_arg, lhs_arg, rhs_arg, nonstationary_arg);
+  arg2->fillPacExpectationVarInfo(var_model_name_arg, lhs_arg, rhs_arg, nonstationary_arg);
+  arg3->fillPacExpectationVarInfo(var_model_name_arg, lhs_arg, rhs_arg, nonstationary_arg);
 }
 
 bool
@@ -5718,10 +5718,10 @@ AbstractExternalFunctionNode::setVarExpectationIndex(map<string, pair<SymbolList
 }
 
 void
-AbstractExternalFunctionNode::fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
+AbstractExternalFunctionNode::fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
 {
   for (vector<expr_t>::const_iterator it = arguments.begin(); it != arguments.end(); it++)
-    (*it)->fillPacExpectationVarInfo(var_model_name, rhs_arg, nonstationary_arg);
+    (*it)->fillPacExpectationVarInfo(var_model_name_arg, lhs_arg, rhs_arg, nonstationary_arg);
 }
 
 bool
@@ -7189,7 +7189,7 @@ VarExpectationNode::setVarExpectationIndex(map<string, pair<SymbolList, int> > &
 }
 
 void
-VarExpectationNode::fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
+VarExpectationNode::fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
 {
 }
 
@@ -7554,11 +7554,13 @@ PacExpectationNode::writeJsonOutput(ostream &output,
 }
 
 void
-PacExpectationNode::fillPacExpectationVarInfo(string &var_model_name_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
+PacExpectationNode::fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg,
+                                              map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg)
 {
   if (var_model_name != var_model_name_arg)
     return;
 
+  lhs = lhs_arg;
   z_vec = rhs_arg;
 
   for (vector<bool>::const_iterator it = nonstationary_arg.begin();
@@ -7581,37 +7583,36 @@ PacExpectationNode::substitutePacExpectation(map<const PacExpectationNode *, con
   if (myit != subst_table.end())
     return const_cast<BinaryOpNode *>(myit->second);
 
+  int maxlag = z_vec.size();
   expr_t subExpr = datatree.AddNonNegativeConstant("0");
   if (stationary_vars_present)
-    for (map<int, set<int> >::const_iterator it = z_vec.begin();
-         it != z_vec.end(); it++)
-      for (set<int>::const_iterator it1 = it->second.begin(); it1 != it->second.end(); it1++)
+    for (int i = 1; i < maxlag + 1; i++)
+      for (vector<int>::const_iterator it = lhs.begin(); it != lhs.end(); it++)
         {
           stringstream param_name_h0;
           param_name_h0 << "h0_" << model_name
-                        << "_var_" << datatree.symbol_table.getName(*it1)
-                        << "_lag_" << it->first;
+                        << "_var_" << datatree.symbol_table.getName(*it)
+                        << "_lag_" << i;
           int new_param_symb_id = datatree.symbol_table.addSymbol(param_name_h0.str(), eParameter);
           h0_indices.push_back(new_param_symb_id);
           subExpr = datatree.AddPlus(subExpr,
                                      datatree.AddTimes(datatree.AddVariable(new_param_symb_id),
-                                                       datatree.AddVariable(*it1, it->first)));
+                                                       datatree.AddVariable(*it, i)));
         }
 
   if (nonstationary_vars_present)
-    for (map<int, set<int > >::const_iterator it = z_vec.begin();
-         it != z_vec.end(); it++)
-      for (set<int>::const_iterator it1 = it->second.begin(); it1 != it->second.end(); it1++)
+    for (int i = 1; i < maxlag + 1; i++)
+      for (vector<int>::const_iterator it = lhs.begin(); it != lhs.end(); it++)
         {
           stringstream param_name_h1;
           param_name_h1 << "h1_" << model_name
-                        << "_var_" << datatree.symbol_table.getName(*it1)
-                        << "_lag_" << it->first;
+                        << "_var_" << datatree.symbol_table.getName(*it)
+                        << "_lag_" << i;
           int new_param_symb_id = datatree.symbol_table.addSymbol(param_name_h1.str(), eParameter);
           h1_indices.push_back(new_param_symb_id);
           subExpr = datatree.AddPlus(subExpr,
                                      datatree.AddTimes(datatree.AddVariable(new_param_symb_id),
-                                                       datatree.AddVariable(*it1, it->first)));
+                                                       datatree.AddVariable(*it, i)));
         }
 
   growth_param_index = datatree.symbol_table.addSymbol(model_name +
diff --git a/ExprNode.hh b/ExprNode.hh
index a8d417a0..37cc2c58 100644
--- a/ExprNode.hh
+++ b/ExprNode.hh
@@ -490,7 +490,7 @@ class ExprNode
       virtual bool isVarModelReferenced(const string &model_info_name) const = 0;
 
       //! Fills var_model info for pac_expectation node
-      virtual void fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg) = 0;
+      virtual void fillPacExpectationVarInfo(string &var_model_name, vector<int> &lhs, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg) = 0;
 
       //! Fills map
       virtual void getEndosAndMaxLags(map<string, int> &model_endos_and_lags) const = 0;
@@ -560,7 +560,7 @@ public:
   virtual expr_t removeTrendLeadLag(map<int, expr_t> trend_symbols_map) const;
   virtual bool isInStaticForm() const;
   virtual void setVarExpectationIndex(map<string, pair<SymbolList, int> > &var_model_info);
-  virtual void fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
+  virtual void fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
   virtual bool isVarModelReferenced(const string &model_info_name) const;
   virtual void getEndosAndMaxLags(map<string, int> &model_endos_and_lags) const;
   virtual expr_t substituteStaticAuxiliaryVariable() const;
@@ -639,7 +639,7 @@ public:
   virtual expr_t removeTrendLeadLag(map<int, expr_t> trend_symbols_map) const;
   virtual bool isInStaticForm() const;
   virtual void setVarExpectationIndex(map<string, pair<SymbolList, int> > &var_model_info);
-  virtual void fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
+  virtual void fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
   virtual bool isVarModelReferenced(const string &model_info_name) const;
   virtual void getEndosAndMaxLags(map<string, int> &model_endos_and_lags) const;
   //! Substitute auxiliary variables by their expression in static model
@@ -741,7 +741,7 @@ public:
   virtual expr_t removeTrendLeadLag(map<int, expr_t> trend_symbols_map) const;
   virtual bool isInStaticForm() const;
   virtual void setVarExpectationIndex(map<string, pair<SymbolList, int> > &var_model_info);
-  virtual void fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
+  virtual void fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
   virtual bool isVarModelReferenced(const string &model_info_name) const;
   virtual void getEndosAndMaxLags(map<string, int> &model_endos_and_lags) const;
   //! Substitute auxiliary variables by their expression in static model
@@ -861,7 +861,7 @@ public:
   expr_t getNonZeroPartofEquation() const;
   virtual bool isInStaticForm() const;
   virtual void setVarExpectationIndex(map<string, pair<SymbolList, int> > &var_model_info);
-  virtual void fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
+  virtual void fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
   virtual bool isVarModelReferenced(const string &model_info_name) const;
   virtual void getEndosAndMaxLags(map<string, int> &model_endos_and_lags) const;
   //! Substitute auxiliary variables by their expression in static model
@@ -949,7 +949,7 @@ public:
   virtual expr_t removeTrendLeadLag(map<int, expr_t> trend_symbols_map) const;
   virtual bool isInStaticForm() const;
   virtual void setVarExpectationIndex(map<string, pair<SymbolList, int> > &var_model_info);
-  virtual void fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
+  virtual void fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
   virtual bool isVarModelReferenced(const string &model_info_name) const;
   virtual void getEndosAndMaxLags(map<string, int> &model_endos_and_lags) const;
   //! Substitute auxiliary variables by their expression in static model
@@ -1045,7 +1045,7 @@ public:
   virtual expr_t removeTrendLeadLag(map<int, expr_t> trend_symbols_map) const;
   virtual bool isInStaticForm() const;
   virtual void setVarExpectationIndex(map<string, pair<SymbolList, int> > &var_model_info);
-  virtual void fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
+  virtual void fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
   virtual bool isVarModelReferenced(const string &model_info_name) const;
   virtual void getEndosAndMaxLags(map<string, int> &model_endos_and_lags) const;
   //! Substitute auxiliary variables by their expression in static model
@@ -1234,7 +1234,7 @@ public:
   virtual expr_t removeTrendLeadLag(map<int, expr_t> trend_symbols_map) const;
   virtual bool isInStaticForm() const;
   virtual void setVarExpectationIndex(map<string, pair<SymbolList, int> > &var_model_info);
-  virtual void fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
+  virtual void fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
   virtual bool isVarModelReferenced(const string &model_info_name) const;
   virtual void getEndosAndMaxLags(map<string, int> &model_endos_and_lags) const;
   virtual expr_t substituteStaticAuxiliaryVariable() const;
@@ -1247,6 +1247,7 @@ private:
   const string model_name, var_model_name;
   const int discount_symb_id, growth_symb_id;
   bool stationary_vars_present, nonstationary_vars_present;
+  vector<int> lhs;
   map<int, set<int > > z_vec; // lag -> set< symb_id > (all vars that appear at a given lag)
   vector<int> h0_indices, h1_indices;
   int growth_param_index;
@@ -1304,7 +1305,7 @@ public:
   virtual expr_t removeTrendLeadLag(map<int, expr_t> trend_symbols_map) const;
   virtual bool isInStaticForm() const;
   virtual void setVarExpectationIndex(map<string, pair<SymbolList, int> > &var_model_info);
-  virtual void fillPacExpectationVarInfo(string &var_model_name, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
+  virtual void fillPacExpectationVarInfo(string &var_model_name_arg, vector<int> &lhs_arg, map<int, set<int > > &rhs_arg, vector<bool> &nonstationary_arg);
   virtual bool isVarModelReferenced(const string &model_info_name) const;
   virtual void getEndosAndMaxLags(map<string, int> &model_endos_and_lags) const;
   virtual expr_t substituteStaticAuxiliaryVariable() const;
diff --git a/ModFile.cc b/ModFile.cc
index 7d1f757a..faf33ece 100644
--- a/ModFile.cc
+++ b/ModFile.cc
@@ -389,7 +389,7 @@ ModFile::transformPass(bool nostrict, bool stochastic, bool compute_xrefs, const
               map<int, set<int > > rhs_pac;
               vms->getVarModelName(var_model_name);
               vms->getVarModelRHS(rhs_pac);
-              dynamic_model.fillPacExpectationVarInfo(var_model_name, rhs_pac, nonstationary);
+              dynamic_model.fillPacExpectationVarInfo(var_model_name, lhs, rhs_pac, nonstationary);
               dynamic_model.substitutePacExpectation();
             }
         }