Gresham's law(redirected from Gresham law)
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Related to Gresham law: Bad money drives good money out of circulation
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.]
(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]
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]
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|Noun||1.||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"