When Static solution is chosen, values of the endogenous variables up to the previous period are used each time the model is solved. Lagged endogenous variables and ARMA terms in the model are based on actual values of the endogenous variables. A static solution is typically used to produce a set of one-step ahead forecasts over the historical data so as to examine the historical fit of the model. A static solution cannot be used to predict more than one observation into the future.