Gresham's Law

Summary of Gresham's Law

A principle, articulated by Sir Thomas Gresham in the sixteenth century, that bad money drives good money out of circulation, i.e., when two or more varieties of money are in circulation, both with equal power as legal tender, the one having the greatest intrinsic value will be hoarded, and the less favored currency will continue to circulate.

(Main Author: William J. Miller)