<p>The constraint <span class="math-container">$g(x)\geq 0$</span> is binding if in optimum <span class="math-container">$g(x) = 0$</span> rather than the constraint being slack <span class="math-container">$g(x)&gt;0$</span>.</p>

CC BY-SA 4.0
2020-12-22T04:21:33.777Z
Thank you. How can I solve the problem with such an inequality constraint, like, a' > a_bar?
Carl
CC BY-SA 4.0
2020-12-22T04:25:23.260Z
You can make a new question here on the site to get help. Standard procedure is to use Lagrange.
bomadsen
CC BY-SA 4.0
2020-12-22T03:29:28.483Z
2020-12-22T03:29:28.483Z
bomadsen
<p>I am curious how to solve the utility maximization problem if the representative agent has borrowing constraint.</p>

<macroeconomics><optimization>
What does binding mean?
Carl
# What does binding mean?

(Asked by: username_0 on 2020-12-22)

I am curious how to solve the utility maximization problem if the representative agent has borrowing constraint.

**Tags:** macroeconomics, optimization


---

## 1 answers

### Answer by username_1 on 2020-12-22. Score: 3 | Accepted answer

The constraint $g(x)\geq 0$ is binding if in optimum $g(x) = 0$ rather than the constraint being slack $g(x)>0$.

> **Comments:**
> **username_0**: Thank you. How can I solve the problem with such an inequality constraint, like, a' > a_bar?  
> **username_1**: You can make a new question here on the site to get help. Standard procedure is to use Lagrange.  

---

