what is the baumol tobin model 
the theory developed by william baumol and james tobin studies the tradeoff between the value of the liquidity provided by holding cash versus the value of the interest lost by keeping money liquid the bottom linejames tobin was an american economist who received the 1981 nobel prize in economics he pioneered the tobin tax the study of portfolio selection theory and has influenced theories in economics including the baumol tobin model and the tobin q 