Gresham's law

(redirected from Bad money)
Also found in: Dictionary, Thesaurus, Encyclopedia.
Related to Bad money: mad money

Gresham's Law

The theory that given two types of money with the same nominal value but different real values, the "bad" money will be spent while the "good" money will be hoarded. Strictly, the law only applies if the exchange rate between the two monies is decreed by the state, but it is sometimes invoked more broadly. While it does not always hold true, one example was the hoarding of U.S. coins in the 20th century as they gradually came to be minted with less valuable metals.

Gresham's law

the economic hypothesis that ‘bad’ MONEY forces ‘good’ money out of circulation. The principle applies only to economies the domestic money system of which is based upon metal coinage that embodies a proportion of intrinsically valuable metals such as silver and gold. Where governments issue new coins embodying a lower proportion of valuable metals, people are tempted to hoard the older coins for the commodity value of their metal content so that the ‘good’ money ceases to circulate as currency.
References in periodicals archive ?
So it is clear that in this suffocating climate created by Erdoy-an's regime that gives the impression of being a mafia-like gang by suspending the rule of law, democracy, freedom of enterprise and the inviolability of private property, bad money drives out good money.
He believes in making bad money from whatever source it comes.
I didn't like it enough for the bad money," she said.
How nice if the bad money that drives out the good money were always very bad money.
Knowing how to manage and make decision on money matters is among major growing challenges across the world, he noted, Good management and decisions on spending money could lead to success and on the other hand bad money management and decisions could lead to disaster.
What we need now is a primer on the major misconceptions in the hope that, unlike Gresham's Law, which says that bad money drives out good money, good economics will drive out bad economics.
Bad money means cheap money--money in too great quantities.
This type of trust can be used for any type of problem such as addictions, or just bad money management.
The Federal Reserve, without so much as a congressional by-your-leave (let alone constitutional authority), has been playing Russian roulette with the American economy ever since the onset of the financial crisis, throwing bad money after bad and producing no outcome other than lengthening and deepening the crisis.
Not bad money for reading the Western Mail and watching Dragon's Eye, eh?
There's going to be a lot more money on the move o good money as well as bad money," Bryan Stirewalt, Managing Director of Supervision at the Dubai Financial Services Authority, told reporters on the sidelines of a workshop at the Central Bank.
There's going to be a lot more money on the move -- good money as well as bad money," Bryan Stirewalt, Managing Director of Supervision at the Dubai Financial Services Authority, told reporters on the sidelines of a workshop at the Central Bank.