  The thermodynamic behavior of a three-dimensional off-lattice model for
protein folding is probed. The model has only two types of residues,
hydrophobic and hydrophilic. In absence of local interactions, native structure
formation does not occur for the temperatures considered. By including sequence
independent local interactions, which qualitatively reproduce local properties
of functional proteins, the dominance of a native state for many sequences is
observed. As in lattice model approaches, folding takes place by gradual
compactification, followed by a sequence dependent folding transition. Our
results differ from lattice approaches in that bimodal energy distributions are
not observed and that high folding temperatures are accompanied by relatively
low temperatures for the peak of the specific heat. Also, in contrast to
earlier studies using lattice models, our results convincingly demonstrate that
one does not need more than two types of residues to generate sequences with
good thermodynamic folding properties in three dimensions.
