For most simulation exercises, it is necessary to provide initial (and possibly terminal) conditions. It is also necessary to provide initial guess values for non-linear solvers. The following statements are used for those purposes:
In many contexts (determistic or stochastic), it is necessary to compute the steady state of a non-linear model: initval then specifies numerical initial values for the non-linear solver. The command resid can be used to compute the equation residuals for the given initial values.
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 Section 6, “Shocks on exogenous variables”.
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 for periods before the beginning of the simulation.