2 What monetary policy can do and what it cannot do 2.1 Lessons from history Ladies and gentlemen,  1/8  BIS central bankers' speeches  In the 16th century, when conquerors robbed the gold and silver treasures of the Americas and brought them to Europe, they also paved the way for inflation.
Early economists (such as Jean Bodin and David Hume) learned that the supply of money has an impact on the price level. As long as an economy operates below capacity limits, a larger money supply can result in a higher output of goods and services. But once full employment is reached, more money will ultimately lead to higher prices.