Developing a generic model of Gresham’s law for qualitative analyses

Abstract

Gresham’s law popularly states that “bad money drives out good”. It originates from monetary policy involving coinage, but it has for years been applied in a number of areas with various degrees of thoroughness and thoughtfulness. Although most applications are paraphrasing, and not scientific usage of analogy, Gresham’s law fits remarkably well in many cases, and therefore deserves study. Analogies are used extensively throughout the history of science, but it requires a deep understanding of a phenomenon and a subsequent generic description that can be transferred to other domains. We believe that Gresham’s law can be described using systems theory since most real-life systems fit within systems theory. We therefore review of Gresham’s law to develop a simple, generic model. Through a simple simulation, to ascertain whether it makes sense or not, we find the generic model useful and we people that it can serve well in system-related, qualitative research.