The inferior coin expels the good currency

"Inferior currency expulsion of good currency" is a famous law in economics. The law is a generalization of a historical phenomenon: in the age of coinage, when those less than the legal weight or the color of the coinage-"bad money" into circulation, people tend to the full value of the currency-"good currency" collection. Finally, the good currency will be expelled, the market is only a bad currency in circulation. The information asymmetry of the parties is the basis of the phenomenon of "inferior currency expelling good currency". Because if both sides of the transaction are familiar with the color or authenticity of the currency, it is difficult for the holder of the inferior currency to use the inferior currency, or, even if it can be used, it can only be traded with the other party in accordance with the "actual" rather than the "legal" value of the inferior currency. The pioneer of asymmetric information theory was George Akerlof, a professor of economics at the University of California, where he won the 2001 Nobel Prize in Economics. But his groundbreaking paper, "Lemon" market (in English, the defective word "lemon") was once thought to be "superficial" and had been rejected by three authoritative economic journals. After several setbacks, the paper was published in the Economics Quarterly of Harvard University, which immediately aroused great repercussions.

The inferior coin expels the good currency