Benjamin Franklin and Monetary Policy in Colonial Pennsylvania
The running argument between those
who advocate expansionary monetary policies
and rising prices, on the one hand, and
those who favor stable or falling prices, on the
other hand, is very old. American debate on
this subject traces its origins to the 17th century.
Deflation, accompanied by complaints
of a scarcity of money, was present in both
England and her colonies in America. British
government policies prohibited exporting
gold and silver to the colonies. The precious
metals earned by Americans in trade with the
Spanish colonies were sent to Britain in payment
for British goods.