In economics, Gresham's law is a monetary principle stating that "bad money drives out good". For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will gradually disappear from circulation.[1][2]
The law was named in 1857 by economist Henry Dunning Macleod after Sir Thomas Gresham (1519–1579), an English financier during the Tudor dynasty.[3] Gresham had urged Queen Elizabeth to restore confidence in then-debased English currency.
The concept was thoroughly defined in Renaissance Europe by Nicolaus Copernicus and known centuries earlier in classical Antiquity, the Near East, and China.
- ^ Gresham's law – economics. Encyclopædia Britannica. Retrieved 8 April 2018.
- ^ Staff, Investopedia (9 February 2010). "Gresham's Law". Investopedia. Retrieved 8 April 2018.
- ^ Macleod, Henry Dunning (1896). The History of Economics. London: Bliss, Sands and Co. pp. 38-39, 146, 448 -. Retrieved 7 December 2023 – via Internet Archive.