Is the Baumol's 'Square Root Law' Still Relevant? Evidence from Micro-Level Data

7 Pages Posted: 15 Jul 2006

See all articles by David Bounie

David Bounie

Telecom ParisTech

Abel Francois

Strasbourg University, LARGE; University of Strasbourg - EM Strasbourg Business School; Telecom ParisTech

Date Written: June 2006

Abstract

The objective is to test, from micro-level data, the complete general framework of the transaction demand for money à la Baumol established fifty years ago. The results confirm the relevancy of the Baumol's square root law while pointing out for the first time the impact of the subjective risk on cash holding.

Keywords: Demand for Money

JEL Classification: E41

Suggested Citation

Bounie, David and Francois, Abel, Is the Baumol's 'Square Root Law' Still Relevant? Evidence from Micro-Level Data (June 2006). Available at SSRN: https://ssrn.com/abstract=915005 or http://dx.doi.org/10.2139/ssrn.915005

David Bounie (Contact Author)

Telecom ParisTech ( email )

46 rue Barrault
F-75634 Paris, Cedex 13
France

Abel Francois

Strasbourg University, LARGE ( email )

47 avenue de la foret Noire
Strasbourg, 67000
France

HOME PAGE: http://abelfrancois.wordpress.com/information/

University of Strasbourg - EM Strasbourg Business School ( email )

PEGE
61 avenue de la Forêt Noire
Strasbourg, 67000
France

HOME PAGE: http://abelfrancois.wordpress.com/information/

Telecom ParisTech

46, rue Barrault
Paris Cedex 13, F-75634
France

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