Gresham's Law

views updated May 18 2018

Gresham's Law the tendency for money of lower intrinsic value to circulate more freely than money of higher intrinsic and equal nominal value (often expressed as ‘Bad money drives out good’). It is named for the English financier Thomas Gresham (c.1519–79), who founded the Royal Exchange in 1566 and served as the chief financial adviser to the Elizabethan government. Gresham's emblem, a grasshopper, was later used by Martin's Bank.

More From encyclopedia.com