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The process of conversion of diethyl malonate to a carboxylic acid in three steps is known as the malonic ester reaction.It takes place when $\mathrm{Î\pm }$-hydrogen is abstracted from diethyl malonate followed by a nucleophilic attack on the halide group. The last steps are hydrolysis and decarboxylation.

Decarboxylation is the process of removing carbon dioxide from any structure.

Decarboxylation takes place in those cases where a carboxylic group (COOH) is bonded to the $\mathrm{Î\pm }$ carbon of another carbonyl group or a structure where a $\mathrm{β}$-keto acid is present. After the removal of carbon dioxide, the negative charge formed in the adjacent carbonyl group is stabilized by the -I effect of the carbonyl group. The process is entropically favorable due to the release of gas.

The steps required for the conversion of diethyl malonate to a carboxylic acid are shown below:-

Representation of product formed by malonic ester reaction