The gold (and silver and other metals) standard. When more gold was discovered, all of the sudden, there was a huge increase in the money supply. When no one di

The gold (and silver and other metals) standard. When more gold was discovered, all of the sudden, there was a huge increase in the money supply. When no one discovered any gold for a little while, deflation increased. There are other reasons including weak governments that had much less control over the economy and a lack of knowledge about how the economy worked but the money supply was a big part of it.