Gresham's Law
- noun
- /ˈɡrɛʃəmz lɔ/
- Specialized
:
Ley de Gresham
- According to Gresham's Law, when two forms of currency exist, the one with less value will circulate more freely.
- Gresham's Law about bad money
- Gresham's Law about money
Examples
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As Gresham's Law reminds us, if the poor and non-poor are combined within a single program, the non-poor will always drive out the poor.
Academic text (1998) -
During the second half of the 17th century, the market price of gold had fallen in terms of silver, so that, in accord with Gresham's Law, bad money (gold coins) began to drive out good money (silver coins).
Academic text (1990) -
"Gresham's Law is that bad money drives out good.
Fiction book (1994) -
The democracy of cultural exchange often operates on the principles of Gresham's law: bad money drives out good money.
Academic text (1997) -
The rub here is that academe is also the best place to understand the cunning contained in Gresham's Law about bad money driving out good.
Academic text (1999) -
The disequilibrium exchange rates needed to validate Gresham's Law may thus not fully materialize.
Academic text (1990) -
So Reid was wrong about Gresham's Law—
Fiction book (1994) -
The competition between the two major international currencies would result in a kind of "Gresham's law" in reverse, because the more stable currency would be preferred in international transactions.
Academic text (1990) -
Gresham's Law states that when both good and bad money are in circulation, the bad money tends to drive the good money out of circulation.
-
Economists often reference Gresham's Law to illustrate how inferior currencies can overshadow superior ones in the marketplace.
Synonyms
When people use bad money, they keep better money and it disappears
Surface Forms
Morphology
Gresham's + law
Although the word 'law' indicates a general principle, 'Gresham's' is an eponymic proper name that gives no clue about the economic content. The specific principle about bad money driving out good (coinage, hoarding, circulation) is specialized and cannot be derived from the constituent words by a B1 learner, so prior cultural/economic knowledge is required.
Etymology
Gresham's Law comes from a story about Sir Thomas Gresham, who noticed that when cheap coins and silver coins were used together, people spent the cheap ones and kept the silver ones. That left the 'bad money' in use and the 'good money' hidden, so the phrase means 'bad money drives out good'.
