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.

---

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

---

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.

---

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

Like Gresham’s law about bad money.

From Literature

If you talk to economists, they will tell you something about Gresham's law, which occurs when two different currencies are given the same value.

From BBC

As in economics, so too in G.O.P. politics: Gresham’s law applies.

From New York Times

There is no lexicographical version of Gresham’s Law in which the bad meaning of a word always drives out the good one.

From Literature