@article {19011,
	title = {Does observational equivalence always hold in hyperbolic discounting models?},
	journal = {Economics Bulletin},
	volume = {5},
	year = {2006},
	pages = {1-8},
	abstract = {Observation equivalence holds in the hyperbolic discounting models such as Laibson (1996), Barro (1999), and Krusell et al (2002). We study a hyperbolic discounting model where the policy function cannot be replicated by a geometric discounting model. Under the logarithmic utility and Cobb-Douglas production, we obtain the explicit solution for consumer{\textquoteright}s consumption-saving decision. Different from the literatures of exponential discounting, our model shows that the habit persistence affects consumer{\textquoteright}{\textquoteright}s consumption-saving decision. Therefore, observational equivalence does not hold in our hyperbolic discounting model.},
	author = {Liutang Gong and Shenghao Zhu}
}
