The United States has experienced three major price inflations since 1914, and each has been preceded and accompanied by a corresponding increase in the rate of growth of the money supply: 1914 to 1920, 1939 to 1948, 1967 to 1980. An acceleration of money growth in excess of real output growth has invariably produced inflation—in these episodes and in many earlier examples in this country and elsewhere in the world.
To ignore the magnitude of money supply changes is to court monetary disorder. That is the lesson that the history of money supply teaches.