"the building of the Temple from the Bible and the Mishna in tractate Bava Metzia () from the Talmud. Ibn Taimiyyah (1263–1328) described the phenomenon as follows: In an influential theoretical article, Rolnick and Weber (1986) argued that bad money would drive good money to a premium, rather than driving it out of circulation. However, their research did not take into account the context in which Gresham had made his observation. Rolnick and Weber ignored the influence of legal tender legislation, which requires people to accept both good and bad money as if they were of equal value. They also"
"is supposed to be, it would probably be twice as good as yesterday was. Law Number III: There are no lazy veteran lion hunters. Law Number IV: If you can afford to advertise, you don't need to. Law Number V: One-tenth of the participants produce over one-third of the output. Increasing the number of participants merely reduces the average output. Law Number VI: A hungry dog hunts best. A hungrier dog hunts even better. Law Number VII: Decreased business base increases overhead. So does increased business base. Law Number VIII: The most unsuccessful four years in the education of a"
"for its bullion value, money that is considered to be ""good"" tends to leave an economy through international trade. International traders are not bound by legal tender laws as citizens of the issuing country are, so they will offer higher value for good coins than bad ones. The good coins may leave their country of origin to become part of international trade, escaping that country's legal tender laws and leaving the ""bad"" money behind. This occurred in Britain during the period of the gold standard. The law was named after Sir Thomas Gresham, a sixteenth-century financial agent of the English"
"because people do not have enough money. He argued that the power to purchase can only be increased through more production. James Mill used Say's law against those who sought to give the economy a boost via unproductive consumption. In his view, consumption destroys wealth, in contrast to production, which is the source of economic growth. The demand for a product determines the price of the product. According to Keynes (see more below), if Say's law is correct, widespread involuntary unemployment (caused by inadequate demand) cannot occur. Classical economists in the context of Say's law explain unemployment as arising from"
"Goodhart's law Goodhart's law is an adage named after economist Charles Goodhart, which has been phrased by Marilyn Strathern as: ""When a measure becomes a target, it ceases to be a good measure."" One way in which this can occur is individuals trying to anticipate the effect of a policy and then taking actions which alter its outcome. Goodhart first advanced the idea in a 1975 paper, which later became used popularly to criticize the United Kingdom government of Margaret Thatcher for trying to conduct monetary policy on the basis of targets for broad and narrow money. His original formulation"
"the U.S. during Prohibition. This effect is called Iron law of prohibition or Cardinal rule of prohibition. Another example is that Australians drink higher-quality Californian wine than Californians, and vice versa, because it is only worth the transportation costs for the most expensive wine. Colloquially, the Alchian–Allen theorem is also known as the “shipping the good apples out” theorem (Thomas Borcherding), or as the “third law of demand.” Alchian–Allen effect The Alchian–Allen effect was described in 1964 by Armen Alchian and William R Allen in the book ""University Economics"" (now called ""Exchange and Production"" ). It states that when the"
"the supply and demand for money than by saving and investment. Before interest rates can adjust sufficiently, excessive hoarding causes the vicious circle of falling aggregate production (recession). The recession itself lowers incomes so that hoarding (and saving) and dis-hoarding (and real investment) can reach a state of balance below full employment. Worse, a recession would hurt private real investment—by hurting profitability and business confidence—through what is called the accelerator effect. This means that the balance between hoarding and dis-hoarding would be pushed even further below the full-employment level of production. Say's law In classical economics, Say's law, or the"
"Law of value The law of value (German: ""Wertgesetz"") is a central concept in Karl Marx's critique of political economy first expounded in his polemic ""The Poverty of Philosophy"" (1847) against Pierre-Joseph Proudhon with reference to David Ricardo's economics. Most generally, it refers to a regulative principle of the economic exchange of the products of human work, namely that the relative exchange-values of those products in trade, usually expressed by money-prices, are proportional to the average amounts of human labor-time which are currently socially necessary to produce them. Thus, the fluctuating exchange value of commodities (exchangeable products) is regulated by"
"Say's Law (in Keynes's formulation, that ""supply creates its own demand"") does not hold in a monetary economy. President Richard Nixon famously said in 1971 (ironically, shortly before Keynesian economics fell out of fashion) that ""We are all Keynesians now"", a phrase often repeated by Nobel laureate Paul Krugman (but originating with anti-Keynesian economist Milton Friedman, said in a way different from Krugman's interpretation). Nevertheless, starting with Axel Leijonhufvud, this view of Keynesian economics came under increasing challenge and scrutiny and has now divided into two main camps. The majority new consensus view, found in most current text-books and taught"
"are favorites to take the dollar's place in countries hostile towards America, like Iran. He then tackles the lack of regulatory oversight employed in the housing market and how the housing boom was allowed to run free under Alan Greenspan. The book concludes with the proposal that America is employing bad capitalism and extends Gresham's Law of currency to suggest that our good capitalism will be driven out by the bad. Kevin Phillips (political commentator) Kevin Price Phillips (born November 30, 1940) is an American writer and commentator on politics, economics, and history. Formerly a Republican Party strategist before becoming"
"of badly run corporations was rewarding bad behavior and punishing good behavior, and that it prevented resources from being allocated away from inefficient uses to more productive uses, and that this lowered the overall amount of wealth across the entire economy. In March 2009 White House budget director Peter Orszag said, ""Job losses began in January 2008. The stock market started declining October 2007... This has been, you know, eight years in the making, and again, it's going to take some time to work our way out of it."" A September 13, 2008, ""Wall Street Journal"" editorial prior to the"
"Golden Rule (fiscal policy) The Golden Rule is a guideline for the operation of fiscal policy. The Golden Rule states that ""over the economic cycle, the Government will borrow only to invest and not to fund current spending"". In layman's terms this means that on average over the ups and downs of an economic cycle the government should only borrow to pay for investment that benefits future generations. Day-to-day spending that benefits today's taxpayers should be paid for with today's taxes, not with leveraged investment. Therefore, over the cycle the current budget (i.e., net of investment) must balance or be"
"such intervention is always counterproductive. Consider Keynesian-type policies aimed at stimulating the economy. Increased government purchases of goods (or lowered taxes) merely ""crowd out"" the production and purchase of goods by the private sector. Contradicting this view, Arthur Cecil Pigou, a self-proclaimed follower of Say's law, wrote a letter in 1932 signed by five other economists (among them Keynes) calling for more public spending to alleviate high levels of unemployment. Keynes summarized Say's law as ""supply creates its own demand"", or the assumption ""that the whole of the costs of production must necessarily be spent in the aggregate, directly or"
"of the economy's resources. High business profits do not necessarily lead to increased economic growth. (When businesses and banks have a disincentive to spend accumulated capital, such as cash repatriation taxes from profits in overseas tax havens and interest on excess reserves paid to banks, increased profits can lead to decreasing growth.) Economists Kenneth S. Rogoff and Carmen M. Reinhart wrote in April 2013, """"Austerity seldom works without structural reforms – for example, changes in taxes, regulations and labor market policies – and if poorly designed, can disproportionately hit the poor and middle class. Our consistent advice has been to"
"a higher rate of return is required for investment to be profitable. Unless the government uses the borrowed funds to invest in projects with a similar rate of return to private investment, capital accumulation falls, with negative consequences upon economic growth. The Golden Rule was one of several fiscal policy principles set out by the incoming Labour government in 1997. These were first set out by then Chancellor of the Exchequer Gordon Brown in his 1997 budget speech. Subsequently they were formalised in the Finance Act 1998 and in the Code for Fiscal Stability, approved by the House of Commons"
"Hard cases make bad law Hard cases make bad law is an adage or legal maxim. The phrase means that an extreme case is a poor basis for a general law that would cover a wider range of less extreme cases. In other words, a general law is better drafted for the average circumstance as this will be more common. The original meaning of the phrase concerned cases in which the law had a hard impact on some person whose situation aroused sympathy. The expression dates at least to 1837. It was used in 1904 by US Supreme Court Justice"
"stated in the 14th century, by Nicole Oresme , in his treatise ""On the Origin, Nature, Law, and Alterations of Money"", and by jurist and historian Al-Maqrizi (1364–1442) in the Mamluk Empire; and noted by Aristophanes in his play ""The Frogs"", which dates from around the end of the 5th century BC. Good money is money that shows little difference between its nominal value (the face value of the coin) and its commodity value (the value of the metal of which it is made, often precious metals, nickel, or copper). In the absence of legal-tender laws, metal coin money will"
"Many lawyers and economists influenced by Keynes worked under the New Deal and believed that free markets would lead to disaster without proper regulation. While the American economy boomed for about 30 years following World War II with the benefit of Keynesianism, robust anti-trust regulation to promote competition and financial regulations to prevent the most volatile forms of market speculation, high unionization rates and protections promoting the growth of domestic industry, during the 1970s stagflation (brought on by the 1973 oil crisis and the shift from the gold standard to fiat currency) was made to discredit the policy consensus set"
"should be changed to primarily benefit consumers, and have no other purpose. Free market economist Milton Friedman states that he initially agreed with the underlying principles of antitrust laws (breaking up monopolies and oligopolies and promoting more competition), but that he came to the conclusion that they do more harm than good. Thomas Sowell argues that, even if a superior business drives out a competitor, it does not follow that competition has ended: Alan Greenspan argues that the very existence of antitrust laws discourages businessmen from some activities that might be socially useful out of fear that their business actions"
"Craving drives all habits and is essential to starting a new habit, or destroying an old one. Duhigg describes how Procter and Gamble used research on the habit loop and its connection to cravings to develop the market for Febreze, a product that eliminates bad odors, to make a fortune. The Golden rule of habit change helps stop addictive habits and replace them with new ones. It states that if you keep the initial cue, replace the routine, and keep the reward, change will eventually occur, although individuals who do not believe in what they are doing will likely fall"
"if you legislate to make the well-to-do prosperous, this prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class and rest upon them."" That's the stuff! Give the prosperous man the dickens! Legislate the thriftless man into ease, whack the stuffing out of the creditors and tell the debtors who borrowed the money five years ago when money ""per capita"" was greater than it is now, that the contraction of currency gives him a right to repudiate. The"
"Demerit good In economics, a demerit good is ""a good or service whose consumption is considered unhealthy, degrading, or otherwise socially undesirable due to the perceived negative effects on the consumers themselves"". It is over-consumed if left to market forces. Examples of demerit goods include tobacco, alcoholic beverages, recreational drugs, gambling, junk food and prostitution. Because of the nature of these goods, governments often levy taxes on these goods (specifically, sin taxes), in some cases regulating or banning consumption or advertisement of these goods. There is an important conceptual distinction between a demerit good and a negative externality. A negative"
"measures of good governance (such as accountability, effectiveness, rule of law, low corruption) to be related to higher rates of economic development. Funds from aid and natural resources are often diverted into private hands and then sent to banks overseas as a result of graft. If Western banks rejected stolen money, says a report by Global Witness, ordinary people would benefit “in a way that aid flows will never achieve”. The report asked for more regulation of banks as they have proved capable of stanching the flow of funds linked to terrorism, money-laundering or tax evasion. Some, like Thomas Pogge,"
"which applied the Sherman Antitrust Act to the securities company, has been described as a reaction to President Theodore Roosevelt's wish to dramatize the issues of monopolies and trusts. The legal scholar Glanville Williams questioned the adage's usage in 1957, writing, ""It used to be said that 'hard cases make bad law'—a proposition that our less pedantic age regards as doubtful. What is certain is that cases in which the moral indignation of the judge is aroused frequently make bad law."" Bryan A. Garner calls the phrase a cliche; while mentioning Williams's disparagement, he asserts that it remains in frequent"
"Mises wrote, ""The popularity of inflation and credit expansion, the ultimate source of the repeated attempts to render people prosperous by credit expansion, and thus the cause of the cyclical fluctuations of business, manifests itself clearly in the customary terminology. The boom is called good business, prosperity, and upswing. Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression. People rebel against the insight that the disturbing element is to be seen in the malinvestment and the overconsumption of the boom period and that such an artificially induced boom"
"Finagle's law Finagle's law of dynamic negatives (also known as Melody's law or Finagle's corollary to Murphy's law) is usually rendered as ""Anything that can go wrong, will—at the worst possible moment."" The term ""Finagle's law"" was first used by John W. Campbell, Jr., the influential editor of ""Astounding Science Fiction"" (later ""Analog""). He used it frequently in his editorials for many years in the 1940s to 1960s, but it never came into general usage the way Murphy's law has. One variant (known as O'Toole's corollary of Finagle's law) favored among hackers is a takeoff on the second law of"
"real shocks cause recessions and that the market responds efficiently to these real economic shocks. Paul Krugman dismisses Say's law as, ""at best, a useless tautology when individuals have the option of accumulating money rather than purchasing real goods and services"". It is not easy to say what exactly Say's law says about the role of money apart from the claim that recession is not caused by lack of money. The phrase ""products are paid for with products"" is taken to mean that Say has a barter model of money; contrast with circuitist and post-Keynesian monetary theory. One can read"
"the country's economic policy. The Act's sponsors embraced conventional Keynesian economics, which advocates aggressive government spending to increase economic demand. In particular, Keynesian theory asserts that the government can minimize the shock of business fluctuations by ""compensatory spending"", which is intended to maintain or inflate investment levels by government spending. Consistent with Keynesian theory, the Act provides for measures to create temporary government jobs to reduce unemployment, as was attempted during the Great Depression. The Act also encouraged the government to develop a sound monetary policy, to minimize inflation, and to push toward full employment by managing the amount and"
"go wrong!"", Yhprum's law, where the name is spelled backwards, is ""anything that can go right, will go right"" — the optimistic application of Murphy's law in reverse. Peter Drucker, the management consultant, with a nod to Murphy, formulated ""Drucker's Law"" in dealing with complexity of management: ""If one thing goes wrong, everything else will, and at the same time."" Mrs. Murphy's Law is a corollary of Murphy's Law. It states that things will go wrong when Mr. Murphy is away, as in this formulation: Murphy's law Murphy's law is an adage or epigram that is typically stated as: ""Anything"
"in proportion to the amount of money they already hold. Economist Steven Landsburg proposes in ""The Armchair Economist"" that burning one's fortune (in paper money) is a form of philanthropy more egalitarian than deeding it to the United States Treasury. In 1920, Thomas Nixon Carver wrote that dumping money into the sea is better for society than spending it wastefully, as the latter wastes the labor that it hires. Central banks routinely collect and destroy worn-out coins and banknotes in exchange for new ones. This does not affect the money supply, and is done to maintain a healthy population of"
"CAPITAL EMPLOYED IN IT GIVE BUT ONE HALF THE ENCOURAGEMENT TO THE INDUSTRY OR PRODUCTIVE LABOR OF THE COUNTRY."" These quotations of Adam Smith instruct that foreign trade will just give half the encouragement to domestic industry or the productive labor of the nation, but favoring domestic commerce will assist domestic industry in ways foreign commerce could not. This challenges the system of free trade, which is built upon cheap labor, and foreign commerce is the way to riches. Byles not only used Adam Smith to refute free trade, but he refuted McCulloch as well. McCulloch stated that buying foreign"
"as Lehman Brothers, which had caused a run on money-market funds and caused a crisis of confidence that brought interbank lending to a standstill. On November 24, 2008, Republican Congressman Ron Paul (R-TX) wrote, ""In bailing out failing companies, they are confiscating money from productive members of the economy and giving it to failing ones. By sustaining companies with obsolete or unsustainable business models, the government prevents their resources from being liquidated and made available to other companies that can put them to better, more productive use. An essential element of a healthy free market, is that both success and"
"some cases, its use has been illegal. Adam Fergusson pointed out that in 1923, during the great inflation in the Weimar Republic, Gresham's Law began to work in reverse, as the official money became so worthless that virtually nobody would take it. That was particularly serious because farmers began to hoard food. Accordingly, any currency backed by any sort of value became a circulating medium of exchange. In 2009, hyperinflation in Zimbabwe began to show similar characteristics. Those examples show that in the absence of effective legal tender laws, Gresham's Law works in reverse. If given the choice of what"