In molecular dynamics we follow the laws of classical mechanics, and most notably Newton's law:
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completely determined.
In more pictorial terms, atoms will ``move'' into the computer,
bumping into each other, wandering around (if the system is fluid),
oscillating in waves in concert with their neighbors, perhaps
evaporating away from the system if there is a free surface,
and so on, in a way pretty similar to what atoms in a
real substance would do.
The computer calculates a trajectory in a 6N-dimensional phase space (3N positions and 3N momenta). However, such trajectory is usually not particularly relevant by itself. Molecular dynamics is a statistical mechanics method. Like Monte Carlo, it is a way to obtain a set of configurations distributed according to some statistical distribution function, or statistical ensemble. An example is the microcanonical ensemble, corresponding to a probability density in phase space where the total energy is a constant E:
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According to statistical physics, physical quantities are represented by averages over configurations distributed according to a certain statistical ensemble. A trajectory obtained by molecular dynamics provides such a set of configurations. Therefore, a measurements of a physical quantity by simulation is simply obtained as an arithmetic average of the various instantaneous values assumed by that quantity during the MD run.
Statistical physics is the link between the microscopic behavior and thermodynamics. In the limit of very long simulation times, one could expect the phase space to be fully sampled, and in that limit this averaging process would yield the thermodynamic properties. In practice, the runs are always of finite length, and one should exert caution to estimate when the sampling may be good (``system at equilibrium'') or not. In this way, MD simulations can be used to measure thermodynamic properties and therefore evaluate, say, the phase diagram of a specific material.
Beyond this ``traditional'' use, MD is nowadays also used for other purposes, such as studies of non-equilibrium processes, and as an efficient tool for optimization of structures overcoming local energy minima (simulated annealing).