4. Initial and terminal conditions

In many contexts, it is necessary to compute the steady state of a non-linear model initval specifies then numerical initial values for the non-linear solver.

Used in perfect foresight mode, the types of forward-loking models for which Dynare was designed require both initial and terminal conditions. Most often these initial and terminal conditions are static equilibria, but not necessarily.

One typical application is to consider an economy at the equilibrium, trigger a shock in first period, and study the trajectory of return at the initial equilbrium. To do that, one needs initval and shocks(see next section).

Another one is to study, how an economy, starting from arbitrary initial conditions converges toward equilibrium. To do that, one needs initval and endval;

For models with lags on more than one period, the command histval permits to specify different historical initial values in different periods.