It was originally proposed by Ferdinand de Saussure for Baltic to explain forms such as Lithuanian dùkterį, dùkteres (compare Ancient Greek thugatéra, thugatéres), but was later generalized in 1933 to Balto-Slavic by Pedersen, who then assumed that accentual mobility spread from the consonant-stems to Balto-Slavic eh₂-stems and o-stems.
The term "Pedersen's law" is also applied to later Common Slavic developments in which the stress retraction to prefixes/proclitics can be traced in mobile paradigms, such as Russian ná vodu 'onto the water', né byl 'was not', pródal 'sold', and póvod 'rein'.
Proto-Indo-European *poh₂imń̥ ~ *poh₂imén 'shepherd' (Ancient Greek poimḗn, accusative singular poiména) > Lithuanian piemuõ, acc.
Proto-Indo-European *gʰolHwéh₂ with Balto-Slavic semantics of 'head' > Lithuanian galvà (with accusative singular gálvą), Russian golová (acc.
Later the retraction of stress spread by analogy to non-consonant stems in case-forms where Pedersen's law applied (commonly termed "barytonesis").