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# Degradation of Coin

## Definition

The process by which coins lose value through wear, clipping, or official reduction in their precious metal content, which Smith identifies as a major source of monetary instability.

## Source Chapter

Book I, Chapter 5

## Context

Smith discusses how degradation of coin affects the real value of money rents and contracts, using historical examples to show how this has reduced the value of fixed payments over time.

## Economic Domain

Regulation

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