The neutrality of changes in the monetary base and reserve requirements is examined assuming the existence of two forms of money and an arbitrary number of other financial assets. Necessary and sufficient conditions for a policy to be neutral are developed. Several forms of institutional structure for the banking system are examined to see whether these structures satisfy the derived necessary conditions. It is shown that reserve requirement changes are neutral under very restrictive conditions. Moreover, even the neutrality of monetary base changes requires that money maintenance cost functions be homogeneous of degree zero in nominal money and prices.

Arthur S. De Vany, Thomas R. Saving, Life-Cycle Job Choice and the Demand and Supply of Entry Level Jobs: Some Evidence from the Air Force, The Review of Economics and Statistics, Vol. 64, No. 3 (Aug., 1982), pp. 457-465

This paper develops a model of quality determination where the usual competitive equilibrium conditions hold. The explicit form of quality considered is the wait required to obtain the product. The analysis, however, is much more general, being valid for products that have a characteristic, z, such that (1) demand is a function of price and a measure defined on z, (2) costs are a function of output and the measure on z, and (3) z is a function of output and capacity. Expected profit-maximizing firms, in equilibrium, look like monopolistic competitors. Once constant quality is imposed, however, the perfect competitive results obtain.