Simple Strategies Drive Out the Subtle

“Bad money drives out the good.” This sentence is universally known as Gresham’s Law — named for Sir Thomas Gresham, who is famous for six words he never said and for a concept he did not invent. Over four centuries ago, however, Gresham did make the core point in a letter to Queen Elizabeth I: If government has minted both good coins (with lots of silver) and bad coins (with not as much silver), the public will hoard the good coins— driving them out of circulation.