Hello and welcome to Gresham’s Law, a blog about markets and economics. Here’s a short list of what you can find here:
- Articles about finance, markets, economics (especially monetary economics) and politics.
- Charts galore!
- Rare historical economic data.
Enjoy and keep in touch!
What is Gresham’s law?
Gresham’s law is the catchphrase that says: ‘Bad money drives out good’. This insight was noted by Sir Thomas Gresham (as well as several people before him). He lived during a time of ‘decreed exchange ratios’ where certain coins (usually debased or worn coins) became overvalued with respect to other coins. These skewed valuations lead to a profit-motive to use the overvalued money in exchange and hoard (or export) the undervalued money. In other words, the ‘bad money drove out [the] good [money]‘.