Uses and Abuses of Gresham's Law in the History of Money.

Mundell, R. A. (1998). Uses and Abuses of Gresham's Law in the History of Money. Zagreb Journal of Economics, 2(2), 3-38.

Type

Journal article

Intellectual base

Primary research

Year

1998

Volume

2

Issue

2

Pages

3-38

Link

https://www.usagold.com/greshamslaw-mundell/

Cited from

economics_finance

Cited by

1 citation across 1 artifact.

Each citation links to the sentence it supports in the citing article.

Primes

• Gresham's Law
  • Gresham's law, classically stated, holds that when two monies are legally compelled to circulate at the same nominal value but have different intrinsic worth, the overvalued (cheaper) money drives the undervalued (more valuable) money out of circulation.

    This sourceStates Gresham's law precisely — under enforced legal parity, overvalued money drives undervalued money from circulation — and corrects common misstatements of the qualifier.

    Supported in partVerified against the work's full text

    Mundell sets out the principle "in its broadest form": where legal enactment assigns the same nominal value to circulating media "whose intrinsic values differ", payment is made in the medium "of which the cost of production is least", and "the more valuable medium will tend to disappear from circulation". Legal parity, differing intrinsic worth, and cheap money displacing dear money are the elements of the classical statement the sentence gives. The passage states the classical formulation inside Mundell's wider discussion, which holds that the law is activated only where a disequilibrium situation exists.

    “cheap money drives out dear, if they exchange for the same price”

    Read by an automated reader; not a human review. How support was checked

Verification

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