We educate first-time investors.
Low-key, professional guidance for safe haven investors.












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

by Robert Mundell
Nobel Prize for Economics, 1999

Editor's note: Herewith, Nobel laureate Dr. Robert Mundell makes his second appearance at the Gilded Opinion. The highly influential Columbia University economist is well-known to our readers for his reservations about fiat money and his advocacy of a gold component in monetary systems, including circulating gold coinage. But he also has written voluminously on a wide range of other topics. As early as 1961, Mundell proposed reducing tax rates and improving monetary discipline as the best means to achieve greater and more stable economic growth. His theories on this subject led to the Kennedy tax-cuts, which propelled the U.S. economy of the 1960s and later became the supply-side basis for much of Reaganomics.

Mundell also wrote early on of the constant realignment problems which would attend a world monetary system of free-floating currencies. His prescient work on the desirability of regional currencies was, in fact, fundamental to the creation of the euro. When Mundell was awarded the 1999 Nobel Prize for economics, Princeton University economist Peter Kenen said, "Bob was modeling the world of the 1990s through the work he did in the 1960s."

In Uses and Abuses of Gresham's Law in the History of Money, Robert Mundell leads us on a lengthy examination of the many centuries of missteps and official monkey business as they applied to the relationship between money and gold. Our thanks go to this very influential man for his permission to reprint the work here in its entirety.


Uses and Abuses of Gresham's Law in the History of Money Paper prepared for publication in the Zagreb Journal of Economics, Volume 2, No. 2, 1998.


The economist H. D. Macleod, writing in 1858, first brought attention to the law that he named after Sir Thomas Gresham:

No sooner had Queen Elizabeth ascended the throne, than she turned her attention to the state of the currency, being moved thereto by the illustrious Gresham, who has the great merit of being as far as we can discover, the first who discerned the great fundamental law of the currency, that good and bad money cannot circulate together. The fact had been repeatedly observed before, as we have seen, but no one, that we are aware, had discovered the necessary relation between the facts, before Sir Thomas Gresham.

This passage errs in two points: Gresham was not the first to make explicit the idea we now know as "Gresham's Law," and the assertion that "good and bad money cannot circulate together" is a glaring error. It is a far cry from Gresham's Law. That Macleod was careless about his statement of the law he named after Gresham serves as a warning that the ideas involved are more subtle than at first appears.


1 2 3 4 5 6 7 8 9 10 11 12 13

Return to the The Gilded Opinion Index Page



Gold dealers index of gold coin images - popular investments

Great prices. Quick delivery. All the time.
Contemporary gold and silver bullion coins
Bullion-related historic gold coins
U.S. $20 gold pieces

Order Desk
Extension #100
6am to 6pm USMT weekdays.

Prefer e-mail to get started?

Coins & bullion since 1973

Ratings Matter!

Better Business Bureau Accreditation
since 1991
Zero complaints

USAGOLD is proud recipient of a Better Business Bureau Gold Star Certificate in consecutive years from 2006 through 2014 for having no complaints during the previous three years.


American Numismatic Association
(since 1975)
Industry Council for Tangible Assets
(since 1985)

USAGOLD website in continuous operation
since 1997

USAGOLD smartphone

Strike gold on your smartphone!

With USAGOLD's new
mobile market monitor.

We were among the first in the industry to offer a gold and silver live pricing page specifically designed for smartphones. It quickly became our highest volume web page. Now, with our newly introduced one-stop mobile portal, we are among the first to offer a complete mini-site purposely designed for smartphones.

News & Views
Forecasts, Commentary & Analysis on the Economy and Precious Metals

Over 20,000 subscribers.

Since the 1990s, gold owners have relied on News & Views for its insights, accuracy and in-depth analysis of the gold market. Its articles and special reports are linked and reprinted by a large number of websites both in the United States and around the globe.

Black Swans Yellow Gold

How gold performs during periods of deflation, chronic disinflation, runaway stagflation and hyperinflation

This in-depth study tells why many investors around the world view gold as the ideal portfolio inclusion for the times.

CLICK HERE for Immediate access.


Throughout, the author, who has over forty years experience in the gold business, suggests practical guidelines for adding gold to your portfolio -- the who, what, when, where, why and how of private gold ownership.


"Simply a superb 'how to' guide book for beginners in gold investing. As good as gold."
Reader review Amazon.com

"Highly recommended!"
Midwest Book Review


Classic Gold Essays
Collected 1997 to present

Bulletin Board
Important site-user announcements


Friday October 9
website support: sitemaster@usagold.com / general mail: admin@usagold.com
Site Map - Risk Disclosure - Privacy Policy - Shipping Policy - Terms of Use
© 1997-2015 USAGOLD All Rights Reserved
Mailing Address - P.O. Box 460009, Denver, CO USA 80246-0009