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used to imply that when two forms of money are in circulation, one of higher value and one of lower value, people tend to hoard or use the money of lower value while spending or getting rid of the money of higher value
What is the origin of the proverb "bad money drives out good" and when to use it?
The proverb "bad money drives out good" is derived from Gresham's Law, named after the English financier Sir Thomas Gresham in the 16th century. It refers to the economic principle that when two types of currency are in circulation, one of lower value and one of higher value, people will tend to spend or get rid of the currency of higher value while hoarding the currency of lower value. This happens because people perceive the lower-value money as less valuable and more easily replaceable, while they prefer to keep the higher-value money for themselves. The saying highlights how economic behavior can influence the circulation and use of money based on its perceived worth.
