INITIALIZATION_STATEMENT;
[INITIALIZATION_STATEMENT]
...
end;
INITIALIZATION_STATEMENT : VARIABLE_NAME = EXPRESSION;
EXPRESSION is any valid expression returning a numerical value and can contain already initialized variable names.
The optional endval; ... end; block serves two purposes. It set the terminal conditions for the simulation with the LBJ alogrithm, when those differ from the initial conditions. When it is the case, the endval block also provides the numerical initialization for various computation tasks (steady, simul), starting in period 1.
Theoreticaly, terminal conditions are required in the LBJ algorithm only for forward variables. However, as endval provides also numerical initialization, it is necessary to provide values for all variables in the model.
When the endval block is followed by the command steady, it is not necessary to provide exact values for the endogenous variables. steady will use the values provided in the endval block as initial guess in the non-linear equation solver and computes exact values for the endogenous variables at the steady state. The steady state is defined by keeping constant the value of the exogenous variables.
Example
var c k;
varexo x;
...
initval;
c = 1.2;
k = 12;
x = 1;
end;
steady;
endval;
c = 2;
k = 20;
x = 2;
end;
steady;
The initial equilibrium is comptuted by steady for x=1, and the terminal one, for x=2.
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