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Economics

Gresham's Law and the Circulation of Debased Currency

Quick fact

The law is named after Sir Thomas Gresham, a 16th-century English financier, but the observation was actually noted by earlier thinkers like Aristophanes and Copernicus.

Why this is interesting

Have you ever noticed that when you have a slightly worn-out dollar bill and a crisp new one, you're more likely to spend the worn one? This simple human tendency—the preference for spending 'bad' money and hoarding 'good' money—is the essence of Gresham's Law, a principle that has shaped economies for centuries.