Gresham's law

American  

noun

Economics.

1. the tendency of the inferior of two forms of currency to circulate more freely than, or to the exclusion of, the superior, because of the hoarding of the latter.

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Gresham's law British  

noun

1. 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

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Gresham's law Cultural  

1. An economic principle proposed by an English financier, Sir Thomas Gresham, that bad money will drive good money out of circulation. For example, if the U.S. government minted silver dollars and then, at a later date, began to mint dollar coins out of cheaper metals, the public would hoard the silver dollars (possibly for later sale at higher prices) rather than use them as a medium of exchange: silver dollars would stop circulating.

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Etymology

Origin of Gresham's law

First recorded in 1855–60; named after Sir T. Gresham

Example Sentences

In an era of instant, inexpensive and high-velocity dissemination of anyone’s words, there is a Gresham’s law of rhetoric: Bad drives out good.

From Washington Post • Aug. 25, 2021

There is a Gresham’s law related to the republican ideal.

From Time • Jun. 26, 2015

When I ask Bill Black now what these last few years tell us about fairness and meritocracy, he refers me to Gresham’s law.

From Salon • Mar. 16, 2014

In the old days, Gresham’s law said that “bad money chases out good.”

From Forbes • Nov. 4, 2013

Many persons fear an outflow of gold from the operation of what is known as "Gresham's law," namely, that "bad money will expel good."

From Money: Speech of Hon. John P. Jones, of Nevada, On the Free Coinage of Silver; in the United States Senate, May 12 and 13, 1890 by Jones, John P. (John Percival)