Ramsey problem and multiplier equal to zero

Hi All,

When I solve the Ramsey problem, is it possible to set one of the Lagrange multipliers associated with one equation equal to zero in steady-state.

In other words, use this equation as a constraint which holds only in steady-state.

Any ideas.



Hi Petros,
I am not sure I understand the intuition. It seems you are trying to confront the Ramsey planner with an occasionally binding constraint that only holds in steady state.

Hi Johannes,

Yes exactly.


Occasionally binding constraints are not easily handled by Dynare See the Occbin toolkit. For Ramsey that is currently not possible.

Many thanks.
I will check the Occbin toolkit.