Gresham's law is an observation
in economics that "bad money drives out good."
More exactly, if coins containing metal of
different value have the same value as legal
tender, the coins composed of the cheaper metal
will be used for payment, while those made of
more expensive metal will be hoarded or
exported and thus tend to disappear from
circulation. Sir Thomas Gresham, financial
agent of Queen Elizabeth I, was not the first to
recognize this monetary principle, but his
elucidation of it in 1558 prompted the economist
H.D. Macleod to suggest the term Gresham's law
in the 19th century.
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