I found something that I think is pretty good evidence showing that the more stable the currency supply, the better the economy runs.
This website shows the change in the U.S. currency supply for the past century: http://www.frbatlanta.org/invoke_brochure.cfm?objectid=83FD41E6-9AF0-11D5-898400508BB89A83&method
If you look from 1950-1960, the supply of U.S. dollars increased only "slightly" compared to other decades. And guess what, the 1950's were a great decade for the economy!
http://en.wikipedia.org/wiki/1950s
...The 1950s in the U.S. were marked with a sharp rise in the economy for the first time in almost 30 years...
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