Gresham's Law

Greshams Law,

Definition of Greshams Law:

  1. The tendency for money of lower intrinsic value to circulate more freely than money of higher intrinsic and equal nominal value (often expressed as “Bad money drives out good”).

  2. Observation that bad money drives out good money. Leading 16th century businessman Sir Thomas Gresham (1519-79), who was also the financial advisor to Queen Elizabeth-I, noticed that when debased (light) coins circulate together with the coins of proper weight and value, people hoard the good ones and pass on the bad ones.

How to use Greshams Law in a sentence?

  1. There is a Greshams law of culture as well as of money: the bad drives out the good, unless the good is defended.

Meaning of Greshams Law & Greshams Law Definition