The use of molecular dynamics (MD) and the inclusion of configuration interaction (CI) effects have been shown to be important in the simulation of polarized absorption spectra for rare-earth doped compounds. This work, focuses on how well the MD approach can account for the temperature dependence of the calculated absorption spectrum for Nd3+:YAG, using the standard MD pair-potential of the Born-Mayer-Huggins form. All simulated spectra are compared to the corresponding experimental spectra. The results indicate that the simple pair-potential must be replaced by a many-body potential to describe the motion of the ions with sufficient accuracy. They also suggest that an “effective temperature” (T') should be used in the MD simulation of the form T'=aT+b