Dear all,
I need a help to handle inequality constraints (like x(t)<=1) in Dynare. I was thinking of adding Lagrange multipliers (lamda(t)) and then apply the usual khun-Tucker condition ((1-x(t))*lamda(t)=0) but still I have to make sure that the multiplier lamda(t) is positive for all t. How do I manage this?
Thanks!