Gresham's law

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Gresh·am's law

The theory holding that if two kinds of money in circulation have the same denominational value but different intrinsic values, the money with higher intrinsic value will be hoarded and eventually driven out of circulation by the money with lesser intrinsic value.

[After Sir Thomas Gresham.]

Gresham's law


Gresham's theorem

(Economics) the economic hypothesis that bad money drives good money out of circulation; the superior currency will tend to be hoarded and the inferior will thus dominate the circulation
[C16: named after Sir Thomas Gresham]

Gresh′am's law′

the tendency of an inferior currency to drive a superior currency out of circulation because of the hoarding of the latter.
[1855–60; after Sir T. Gresham]
ThesaurusAntonymsRelated WordsSynonymsLegend:
Noun1.Gresham's Law - (economics) the principle that when two kinds of money having the same denominational value are in circulation the intrinsically more valuable money will be hoarded and the money of lower intrinsic value will circulate more freely until the intrinsically more valuable money is driven out of circulation; bad money drives out good; credited to Sir Thomas Gresham
principle, rule - a rule or law concerning a natural phenomenon or the function of a complex system; "the principle of the conservation of mass"; "the principle of jet propulsion"; "the right-hand rule for inductive fields"
economic science, economics, political economy - the branch of social science that deals with the production and distribution and consumption of goods and services and their management
References in periodicals archive ?
The phrase "bad money drives out good," known as Gresham's law, served as one of the fundamental principles of economy for some time.
What we need now is a primer on the major misconceptions in the hope that, unlike Gresham's Law, which says that bad money drives out good money, good economics will drive out bad economics.
As is always the case with a legally fixed bimetallic monetary standard, the operation of Gresham's Law (5) ensured that, as soon as the current market price ratio of silver to gold deviated significantly from the legally fixed mint ratio, one metal would "chase" the other out of circulation.
Of course the officials of the SNB, as all financially qualified people, are aware that there is no escape from Gresham's Law, according to which bad money drives out good money.
And just what does the 200 year-old Gresham's Law of Information tell us about how to effectively use social media?
The reason for that is a favorite of economics professors: Gresham's Law.
I have mused also whether a Gresham's Law operates in culture, viz.
GRESHAM'S Law, thankfully, doesn't work in the universe of eating out.
For curiosity I made a comparison with last year's issues of the same magazine; and I can not suggest a more convincing exercise for any person who doubts the validity of Gresham's law in the premises, nor can I suggest a more substantial basis for generalization.
While the multiple exchanges from buyer to seller would certainly have reduced the value of a traded cigarette as a smoke, Gresham's Law insured that only the cigarettes that were least desirable as a smoke were used as a medium of exchange.
A variant of Gresham's law applies: just as bad money drives out good, less desirable businesses keep more desirable businesses away.
It is quite possible that increased reader interaction and vastly diminished control over creation of content will require increased vigilance to ensure the marketplace of ideas is not subjected to Gresham's Law ("Bad money drives out good money"), and that editorial pages will position themselves to take advantage of pillar of free speech defenses; i.