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I apologise for being brief, but I don't understand how is Euler equation used in the Ramsey growth model. I am reading a textbook "Dynamic General Equilibrium Modeling" and there is mentioned about it.

I am modeling the Ramsey model using the Kuhn-Tucker theorem, and I have a set of first-order conditions. I think this is good enough, as I can use a standard constrained optimization method to solve this Ramsey model.

Why do we need the Euler equation, which is a second-order different equation? It is not used in the constrained optimization method.

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Hi Michael. Your question is really an economics question, and unfortunately, the economics stack exchange was recently closed due to lack of participation. While some econ questions also belong on this site, I am not sure you will find the right audience for your question here. – Tal Fishman Jul 18 '12 at 14:06
Hi Tal, thank you for your reply. I think stack exchange is a really good platform, so I am trying my luck by posting my question here. =) – Michael Jul 18 '12 at 14:40
There is a second-order equation in the wiki article en.wikipedia.org/wiki/… -- it's just a guess on my part, but your model may have already incorporated a solution to that equation by the time you're doing the optimization you mention. – JL344 Jul 27 '12 at 4:53

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