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fourth edition

Principles of
Economics
A Streamlined Approach

Frank
Bernanke
Antonovics
Heffetz
 FOURTH EDITION

Principles of
ECONOMICS
A STREAMLINED APPROACH
THE McGRAW HILL SERIES IN ECONOMICS
SURVEY OF ECONOMICS Samuelson and Nordhaus Frank
Economics, Microeconomics, and Microeconomics and Behavior
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 FOURTH EDITION

Principles of
ECONOMICS
A STREAMLINED APPROACH
ROBERT H. FRANK
Cornell University

BEN S. BERNANKE
Brookings Institution [affiliated]
Former Chair, Board of Governors of the Federal Reserve System

KATE ANTONOVICS
University of California, San Diego

ORI HEFFETZ
Cornell University and Hebrew University of Jerusalem
PRINCIPLES OF ECONOMICS: A STREAMLINED APPROACH
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D E D I C AT I O N

For Ellen
R. H. F.

For Anna
B. S. B.

For Fiona and Henry

K. A.

For Katrina, Eleanor, Daniel, and Amalia

O. H.
 A BOUT THE AUTHOR S
ROBERT H. FRANK
Robert H. Frank is the H. J.
Louis Professor of Management
and Professor of ­Economics,
emeritus, at Cornell’s Johnson
School of Management, where
he taught from 1972 to 2020.
After receiving his B.S. from
Georgia Tech in 1966, he
taught math and science for
©Robert H. Frank
two years as a Peace Corps Vol-
unteer in rural Nepal. He re-
ceived his M.A. in statistics in 1971 and his Ph.D. in
economics in 1972 from The University of ­California at
Berkeley. He also holds honorary doctorate degrees from
the University of St. Gallen and ­Dalhousie University. Dur-
ing leaves of absence from ­Cornell, he has served as chief
economist for the Civil Aeronautics Board (1978–1980), a
Fellow at the Center for Advanced Study in the Behavioral
Sciences (1992–1993), Professor of American Civilization at
l’École des Hautes Études en Sciences Sociales in Paris
(2000–2001), and the Peter and Charlotte Schoenfeld Visit-
ing Faculty Fellow at the NYU Stern School of Business in
2008–2009. His papers have appeared in the American
­Economic Review, Econometrica, the Journal of Political Econ-
omy, and other leading professional journals, and for more
than two decades, his economics columns appeared regu-
larly in The New York Times.
Professor Frank is the author of a best-selling intermedi-
ate economics textbook–Microeconomics and Behavior, Tenth
Edition (McGraw Hill, 2021). His research has focused on ri-
valry and cooperation in economic and social behavior. His
books on these themes include Choosing the Right Pond
­(Oxford, 1985), Passions Within Reason (W. W. Norton, 1988),
What Price the Moral High Ground? (Princeton, 2004), Falling
Behind (University of California Press, 2007), The Economic
Naturalist (Basic Books, 2007), The Economic Naturalist’s Field
Guide (Basic Books, 2009), The Darwin Economy (Princeton,
2011), Success and Luck (Princeton, 2016), and Under the Influ-
ence (Princeton, 2020), which have been translated into 24
languages. The Winner-Take-All Society (The Free Press, 1995),
co-authored with Philip Cook, received a Critic’s Choice
Award, was named a Notable Book of the Year by The New
York Times, and was included in BusinessWeek’s list of the 10
best books of 1995. Luxury Fever (The Free Press, 1999) was
named to the Knight-Ridder Best Books list for 1999.
Professor Frank is a co-recipient of the 2004 Leontief
Prize for Advancing the Frontiers of Economic Thought. He
was awarded the Johnson School’s Stephen Russell Distin-
guished Teaching Award in 2004, 2010, 2012, and 2018, and
the School’s Apple Distinguished Teaching Award in 2005.
His introductory microeconomics course has graduated
more than 7,000 enthusiastic economic naturalists over the
years.
vi
BEN S. BERNANKE
Professor Bernanke received
his B.A. in economics from
Harvard University in 1975
and his Ph.D. in economics
from MIT in 1979. He taught at
the Stanford Graduate School
of Business from 1979 to 1985
and moved to Princeton Uni-
versity in 1985, where he was
©Ben S. Bernanke named the Howard Harrison
and ­Gabrielle Snyder Beck Pro-
fessor of Economics and Public Affairs and where he served
as chair of the Economics Department. Professor Bernanke
is currently a Distinguished Fellow in Residence with the
Economic Studies Program at the Brookings Institution.
Professor Bernanke was sworn in on February 1, 2006, as
chair and a member of the Board of Governors of the Federal
Reserve System–his second term expired January 31, 2014. Pro-
fessor Bernanke also served as chair of the Federal Open Mar-
ket Committee, the Fed’s principal monetary policymaking
body. Professor Bernanke was also chair of the President’s
Council of Economic Advisers from June 2005 to January 2006.
Professor Bernanke’s intermediate textbook, with ­Andrew
Abel and Dean Croushore, Macroeconomics, Ninth Edition
­(Addison-Wesley, 2017), is a best seller in its field. He has
­authored numerous scholarly publications in macroeconomics,
macroeconomic history, and finance. He has done significant
research on the causes of the Great Depression, the role of
­financial markets and institutions in the business cycle, and
measurement of the effects of monetary policy on the economy.
Professor Bernanke has held a Guggenheim Fellowship
and a Sloan Fellowship, and he is a Fellow of the Economet-
ric Society and of the American Academy of Arts and Sci-
ences. He served as director of the Monetary Economics
Program of the National Bureau of Economic Research
(NBER) and as a member of the NBER’s Business Cycle Dat-
ing Committee. From 2001 to 2004 he served as editor of
the American Economic Review, and served as the president
of the American Economic Association in 2019. Professor
­Bernanke’s work with civic and professional groups
­includes having served two terms as a member of the
­Montgomery Township (N.J.) Board of Education.
KATE ANTONOVICS
Professor Antonovics received
her B.A. from Brown University
in 1993 and her Ph.D. in eco-
nomics from the University of
Wisconsin in 2000. Shortly
thereafter, she joined the faculty
in the Economics Department at
the University of California, San
©Kate Antonovics

Diego. Professor Antonovics is also currently serving as the
Provost of UC San Diego’s Seventh College.
Professor Antonovics is known for her excellence in
teaching and her innovative use of technology in the class-
room. Her popular introductory-level microeconomics courses
have regularly enrolled over 900 students each fall. She also
teaches labor economics at both the undergraduate and gradu-
ate level. She has received numerous teaching awards, includ-
ing the UCSD Department of Economics award for Best
Undergraduate Teaching, the UCSD Academic Senate Distin-
guished Teaching Award, and the UCSD Chancellor’s Associ-
ates Faculty Excellence Award in Undergraduate Teaching.
Professor Antonovics’s research has focused on racial
discrimination, gender discrimination, affirmative action,
intergenerational income mobility, learning, and wage dy-
namics. Her papers have appeared in the American Economic
Review, the Review of Economics and Statistics, the Journal of
Labor Economics, and the Journal of Human Resources. She is
a member of both the American Economic Association and
the Society of Labor Economists.
ORI HEFFETZ
Professor Heffetz received his
B.A. in physics and philosophy
from Tel Aviv University in
1999 and his Ph.D. in econom-
ics from Princeton University
in 2005. He is an Associate
Professor of Economics at the
Samuel Curtis Johnson Gradu-
ate School of Management at
©Ori Heffetz Cornell University, and at
the Economics Department at
the Hebrew University of ­Jerusalem.
Bringing the real world into the classroom, Professor
Heffetz has created a unique macroeconomics course that
introduces basic concepts and tools from economic theory
and applies them to current news and global events. His
popular classes are taken by hundreds of students every
year on Cornell’s Ithaca and New York City campuses and
via live videoconferencing in dozens of cities across the
United States, Canada, and Latin America.
Professor Heffetz’s research studies the social and cul-
tural aspects of economic behavior, focusing on the mecha-
nisms that drive consumers’ choices and on the links between
economic choices, individual well-being, and policymaking.
He has published scholarly work on household consumption
patterns, individual economic decision making, and survey
methodology and measurement. He was a visiting researcher
at the Bank of Israel during 2011, is currently a Research As-
sociate at the National Bureau of Economic Research (NBER),
and serves on the editorial board of Social Choice and Welfare.
PR EFAC E
A LESS IS MORE FOCUS
Our fourth streamlined edition arrives in the midst of
some of the most dramatic upheavals ever witnessed,
both in the economy generally and in higher educa-
tion in particular. The COVID-19 pandemic has pro-
duced levels of unemployment not seen since the
Great Depression and has created dramatic changes
in the ways we teach across educational institutions at
every level.
These developments have reinforced our confi-
dence in the instructional philosophy that motivated
us to produce our first edition—the need to strip away
clutter and focus more intensively on central con-
cepts. This approach, we believe, is especially well
suited for the new environment.
In earlier editions, we noted that although many
millions of dollars are spent each year on introductory
economics instruction in American colleges and uni-
versities, the return on this investment has been dis-
turbingly low. Studies have shown, for example, that
several months after having taken a principles of eco-
nomics course, former students are no better able to
answer simple economics questions than others who
never even took the course. Most students, it seems,
leave our introductory courses without having learned
even the most important basic economic principles.
Such dismal performance, never defensible, has be-
come even more difficult to justify in the face of loom-
ing resource shortages in higher education.
The problem, in our view, has almost always been
that courses try to teach students far too much. In the
process, really important ideas get little more coverage
than minor ones, and everything ends up going by in
a blur. The human brain tends to ignore new informa-
tion unless it comes up repeatedly. That’s hardly sur-
prising, since only a tiny fraction of the terabytes of
information that bombard us each day is likely to be
relevant for anything we care about. Only when some-
thing comes up a third or fourth time does the brain
start laying down new circuits for dealing with it. Yet
when planning their lectures, many instructors ask
themselves, “How much can I cover today?” And be-
cause modern electronic media enable them to click
through upwards of 100 PowerPoint slides in an hour,
they feel they better serve their students when they
put more information before them. But that’s not the
way learning works! Professors should instead be ask-
ing, “How much can my students absorb?”
vii
viii PREFACE
Our approach to this text was inspired by our con-
viction that students will learn far more if we attempt to
cover much less. Our basic premise is that a small num-
ber of basic ideas do most of the heavy lifting in econom-
ics, and that if we focus narrowly and repeatedly on
those ideas, illustrating and applying them in numerous
familiar contexts, students can actually master them in
just a single semester. The enthusiastic reactions of users
of previous editions of our textbook affirm the validity of
this premise. Our emphasis throughout is on active
learning. We ask students to apply basic economic ideas
themselves to answer related questions, exercises, and
problems.
ADAPTING TO CLASSROOM TRENDS
Baumol’s cost disease refers to the tendency for costs to
rise more rapidly for goods and services for which
growth in labor productivity is either slow or nonexis-
tent. It is thus no surprise that the cost of traditional
methods of delivering classroom instruction has been
rising so much faster than the cost of producing most
manufactured goods.
Largely as a result of Baumol’s cost disease, tuition
increases have far exceeded even the rapid growth in the
cost of health care. This is what we would expect if the
dominant teaching model remains as it was a century
ago, in which a learned instructor stands in front of a
class reciting truths cataloged in an assigned text. But as
the late Herb Stein once remarked, “If something cannot
go on forever, it will stop.” And so it is with rising tu-
itions. Universities are already facing strong pressure to
moderate their rates of tuition growth, pressure that has
been greatly exacerbated by the COVID-19 pandemic.
One result has been that much of the content that
professors have traditionally delivered in live lecture will
instead be delivered electronically. Indeed, technological
advances have given today’s students an unparalleled
ability to access information via the Internet, YouTube,
and social media.
If early experience is any indication, the “flipped-
classroom” model is one of the most promising adapta-
tions to this new environment. In this approach, students
are expected to study basic concepts before coming to
class and then deepen their understanding of them
through structured classroom exercises and discussion.
The logic of the flipped classroom is compelling because
under this approach, students have access to instructors
precisely when students are engaged in those activities
that students find the most challenging (for example,
problem solving and policy evaluation). Indeed, numer-
ous studies have found that the flipped-classroom
a­ pproach increases both student satisfaction and student
learning.
A second adaptation, more pronounced in the wake
of the COVID-19 lockdowns of March 2020, has been the
move to remote instruction. The streamlined approach
of this text is well suited for the goals of both the flipped-
classroom and remote-instruction models. Rather than
trying to bombard students with information they can
easily access online, our book seeks to promote a deeper
understanding of economics by focusing on core con-
cepts. In addition, one of our central goals has been to
create resources to help instructors promote student en-
gagement outside the classroom. Some instructors may
find these resources useful in completely overhauling the
way they teach, while others may be interested in using
them to make a few minor changes to their current
courses.
In other words, this edition is intended to support a
variety of teaching styles (and, indeed, our team of au-
thors varies considerably in our pedagogical approach).
The traditional approach has been to ask students to
read the relevant sections from the textbook before com-
ing to class. But instructors report that today’s students
are far less likely than their predecessors to complete
such assignments. Stronger incentives can boost compli-
ance. One effective approach assigns SmartBook chap-
ters with adaptive questioning built in. Another
administers brief tests at the start of class. These might
involve two or three simple multiple-choice questions on
the assigned material that are administered and graded
electronically via audience response tools using smart-
phone apps.
Perhaps the biggest hurdle to effective implementa-
tion of the new teaching approaches has been a dearth of
effective pre-class concept-delivery materials. To help fill
this gap, we have created a library of short videos that
focus on basic economic concepts. Many students have
found these videos and animations engaging enough to
watch even if they’re not going to be tested on them, but
we’ve also provided easily administered in-class ques-
tions that can boost compliance still further.
A big payoff in both the flipped-classroom and
­remote-instruction models comes from being able to use
limited class time to discuss the concepts that students
have studied before class. One approach begins by ask-
ing students to answer a multiple-choice question requir-
ing application of a concept, and then reporting the
frequencies with which students selected the various
multiple-choice options. Students are then given a few
moments to discuss the question—either with their
neighbors in traditional classroom settings, or with fel-
low students in Zoom breakout rooms—before having an

opportunity to change the answers they originally sub-
mitted. Professors then call on students who’ve offered
both correct and incorrect answers to the question to de-
fend their answers to the class and lead the ensuing dis-
cussion. We’ve spent considerable effort drafting the
kinds of questions that reliably provoke animated discus-
sions of this sort.
In summary, here are the resources we have devel-
oped to support the flipped-classroom and remote-­
instruction approaches, all available within McGraw Hill
Connect® specific to the fourth edition:
Before Class (Exposure)
● SmartBook® Adaptive Reading Assignments:
SmartBook contains the same content as the print
book, but actively tailors that content to the needs of
the individual through adaptive probing and inte-
grated learning resources. Instructions can assign
SmartBook reading assignments for points to create
incentives for students to come to class prepared.
● Learning Glass Lecture Videos: A collection of
brief instructional videos featuring the authors,
Kate Antonovics and Ori Heffetz, utilize exciting
learning glass technology to provide students with
an overview of important economic concepts. Per-
fect for an introduction to basic concepts before
coming to class, or as a quick review, these videos
can be accessed as resources within SmartBook, or
are available as stand-alone assignments within
Connect.
In Class (Engagement)
● Clicker Questions: Classroom-tested by the authors,
these multiple-choice questions are designed to fa-
cilitate discussion and group work in class.
● Economic Naturalist Application-Focused Videos: A
known hallmark of this franchise, the Economic Nat-
uralist examples are now available as an expanded set
of short, engaging video vignettes within Connect
and SmartBook.
After Class (Reinforcement)
● Connect Exercises: All end-of-chapter homework ex-
ercises are available to be assigned within Connect.
Many of these exercises include algorithmic varia-
tions and require students to interact with the
graphing and tool within the platform. Worked
Problem Videos, available as hints within Connect,
work through these problems to aid in student un-
PREFACE ix
derstanding of core economic concepts and offer as-
sistance with more challenging material.
● Test Bank Assessment: Hundreds of multiple-choice
questions are available for summative assessments
of the chapter content. Select problems are now of-
fered as an algorithmic alternative, providing even
more variation.
All of the above assets can be implemented by in-
structors as preferred in order to satisfy as much or as
little of the flipped-classroom approach as is desired.
KEY THEMES AND FEATURES
Economic Naturalism
Relying on examples drawn from familiar contexts, we
encourage students to become “economic naturalists,”
people who employ basic economic principles to under-
stand and explain what they observe in the world around
them. An economic naturalist understands, for example,
that infant safety seats are required in cars but not in
airplanes because the marginal cost of space to accom-
modate these seats is typically zero in cars but often hun-
dreds of dollars in airplanes. Scores of such examples are
sprinkled throughout the text. Each one, we believe,
poses a question that should make any curious person
eager to learn the answer.
Our ultimate goal is to produce economic naturalists—
people who see each human interaction as the result of
an implicit or explicit cost-benefit calculation.
The economic naturalist sees mundane details of or-
dinary existence in a new light and becomes actively en-
gaged in the attempt to understand them. Some
representative examples follow:
In Micro:
● Why do movie theaters offer discount tickets to
­students?
● Why do we often see convenience stores located on
adjacent street corners?
● Why do supermarket checkout lines all tend to be
roughly the same length?
In Macro:
● Why does the average Argentine hold more U.S.
­dollars than the average U.S. citizen?
● Why does news of inflation hurt the stock market?
● Why do almost all countries provide free public
­education?
x PREFACE
Economic Naturalist Video Series: We are very excited
to offer an expanded video series based on Economic
Naturalist examples. A series of videos covering some of
our favorite micro- and macro-focused examples can be
used as part of classroom presentations, or assigned for
homework along with accompanying questions within
McGraw Hill Connect®. These fascinating, fun, and
thought-provoking applications of economics in every-
day life encourage students to think like an economist.
Refer to the distinguishing features pages of the preface
for additional information. You can view one of these
­dynamic videos here: http://econeveryday.com/why-­
do-cooked-rotisserie-chickens-cost-less-than-fresh-­
uncooked-chickens/
Active Learning Stressed
The only way to learn to hit an overhead smash in ten-
nis is through repeated practice. The same is true for
learning economics. Accordingly, we consistently intro-
duce new ideas in the context of simple examples and
then follow them with applications showing how they
work in familiar settings. At frequent intervals, we pose
self-tests that both test and reinforce the understanding
of these ideas. The end-of-chapter questions and prob-
lems are carefully crafted to help students internalize
and extend basic concepts, and are available within
Connect as assignable content so that instructors can
require students to engage with this material. Experi-
ence with earlier editions confirms that this approach
really does prepare students to apply basic economic
ideas to solve economic puzzles drawn from the real
world.
Both the Economic Naturalist and Learning Glass
videos and accompanying multiple-choice questions
that test students’ understanding of the principles
illustrated in the videos have become valued tools for
instructors who incorporate elements of the flipped-
classroom approach in their teaching, or those who
are relying more heavily on other forms of remote
learning. Our less-is-more approach to topic coverage
is also uniquely well suited to these new instructional
approaches.
Modern Microeconomics
● The cost-benefit principle, which tells us to take only
those actions whose benefits exceed their costs, is the
core idea behind the economic way of thinking. Intro-
duced in Chapter 1 and employed repeatedly there-
after, this principle is more fully developed here
than in any other text. It underlies the argument for
economic efficiency as an important social goal.
Rather than speak of trade-offs between efficiency
and other goals, we stress that maximizing economic
surplus—that is, taking those actions whose benefits
exceed their costs—facilitates the achievement of ev-
ery goal we care about.
● One of the biggest hurdles to the fruitful application
of cost-benefit thinking is to recognize and measure
the relevant costs and benefits. Common decision
pitfalls identified by 2002 Nobel Laureate Daniel
Kahneman and others—such as the tendency to ig-
nore implicit costs, the tendency not to ignore sunk
costs, and the tendency to confuse average and mar-
ginal costs and benefits—are introduced early in
Chapter 1 and invoked repeatedly in subsequent
chapters.
● There is perhaps no more exciting toolkit for the
economic naturalist than a few principles of ele-
mentary game theory. In Chapter 7, Games and
Strategic Behavior, we show how these principles en-
able students to answer a variety of strategic ques-
tions that arise in the marketplace and everyday
life. In new Chapter 8, An Introduction to Behavioral
Economics, we survey many of the most exciting de-
velopments in what has become the economics
profession’s most vibrant new field. We believe
that the insights of the Nobel Laureate Ronald
Coase are indispensable for understanding a host
of familiar laws, customs, and social norms. In
Chapter 9, Externalities and Property Rights, we
show how such devices function to minimize misal-
locations that result from externalities.
Modern Macroeconomics
Both the Great Recession and the COVID-19 pandemic
have renewed interest in cyclical fluctuations without
challenging the importance of such long-run issues as
growth, productivity, the evolution of real wages, and
capital formation. Our treatment of these issues is orga-
nized as follows:
● A four-chapter treatment of long-run issues, followed
by a modern treatment of short-term fluctuations and
stabilization policy, emphasizes the important distinc-
tion between short- and long-run behavior of the
economy.
● Designed to allow for flexible treatment of topics, these
chapters are written so that short-run material
(Chapters 18–20) can be used before long-run mate-
rial (Chapters 14–17) with no loss of continuity.
● The analysis of aggregate demand and aggregate
supply relates output to inflation, rather than to the

price level, sidestepping the necessity of a separate
derivation of the link between the output gap and
inflation. The discussion of monetary policy has two
parts. It starts with a standard supply and demand
analysis of the market for money that is centered on
the short-run interest rate. It then introduces the
new tools of monetary policy, such as quantitative
easing and forward guidance, that have been so im-
portant since 2008, and that again took center stage
in the 2020 response to the pandemic.
● This book places a heavy emphasis on globalization,
starting with an analysis of its effects on real wage
inequality and progressing to such issues as the
costs and benefits of trade, the role of capital flows
in domestic capital formation, and the links between
exchange rates and monetary policy.
CHANGES IN THE FOURTH EDITION
Changes Common to All Chapters
In all chapters, the narrative has been tightened. Many
of the examples have been updated, with a focus on
­student-centered examples that connect to current ­topics
such as the COVID-19 pandemic and the rise of the gig
economy. The examples, self-tests, and the end-of-­
chapter material from the previous edition have been
­redesigned to provide more clarity and ease of use. Data
have been updated throughout.
Chapter-by-Chapter Changes
Chapter 1
● Updated student-centered examples, such as Netflix,
wireless keyboards, dogwalking, and Jeff Bezos
● New and updated end-of-chapter problems that re-
inforce the chapter’s learning objectives
● Updated appendix on working with equations,
graphs, and tables based on electric scooter rentals
Chapter 2
● Updated student-centered examples, such as digital
versus print ads and Marvel Studio films
● New Economic Naturalist, “Why was there a
shortage of toilet paper during the COVID-19
­pandemic?”
● Three new end-of-chapter questions that reinforce
the chapter’s learning objectives, including a ques-
tion related to the drop in crude oil prices during the
COVID-19 pandemic
PREFACE xi
Chapter 3
● Minor updates only
● Updated student-centered examples, such as LeBron
James
● New Economic Naturalist, “Why would Jeff Bezos
live in a smaller house in Manhattan than in ­Medina,
Washington?”
Chapter 4
● Minor updates only
Chapter 5
● Minor updates only
Chapter 6
● Updated student-centered examples, such as Insta-
gram, electric scooter rentals, iTunes, HBO, Netflix,
and cable Internet
● Updated end-of-chapter problems
Chapter 7
● Updated student-centered examples, such as the
Ford Mustang and Chevrolet Camaro
Chapter 8
● New to this edition, this chapter serves as an intro-
duction to behavioral economics for those who wish
to incorporate this thought-provoking material
Chapter 9
● Updated student-centered examples, such as room-
mate conflicts
● Updated end-of-chapter questions
Chapter 10
● Updated information on carbon taxes, including
mention of the Paris Agreement
● Updated material on welfare payments, in-kind
transfers, and the negative income tax
Chapter 11
● Updated student-centered examples, such as inte-
rior designer Kelly Wearstler
● Revised Economic Naturalist that discusses the U.S.-
China trade war that started in 2018, highlighting
that there is more to trade than the exchange of
goods and services and its supply and demand anal-
ysis in this chapter; also covers issues such as intel-
lectual property and national security
xii PREFACE
Chapter 12
● Updated discussion of growth that reflects higher
Internet and cell phone penetration
● Updated discussion of recessions and expansions
that mentions the COVID-19 economic disruptions
Chapter 13
● Updated discussion of the correlation between per
capita GDP and health outcomes such as life expec-
tancy that now mentions that within high-income
countries, the relationship can even reverse, with
examples of data from the U.S., Canada, and Japan
● Updated discussion of the development of real
wages for production workers and for highly paid
baseball players over time that is now linked to-
gether, in the context of a new discussion about in-
creasing wage inequalities between the highest- and
lowest-paid U.S. workers
Chapter 14
● Updated examples, data, and figures
Chapter 15
● Clarification throughout the chapter of the differ-
ence between trends in average incomes and trends
in income inequality
● Updated discussion of globalization that now in-
cludes recent developments, including the political
opposition to the Trans-Pacific Partnership trade
agreement and the Trump administration’s resis-
tance to increased economic integration of the U.S.
with China
● New Economic Naturalist, “Can new technology
hurt workers?” that includes what was previously a
paragraph on workers’ resistance to new technology
(with anecdotes on Ned Ludd and the tale of John
Henry); the new EN highlights workers’ concerns
about automation, robotics, and artificial intelli-
gence (AI)
● New Economic Naturalist, “How did the COVID-19
pandemic affect the demand for U.S. jobs?” that dis-
cusses the different effects the pandemic is having
on different jobs in different sectors
● New discussion of European labor markets that
highlights the deregulation in southern Europe fol-
lowing the global financial crisis and that, on some
metrics, Europe’s labor market does better than the
U.S. labor market
Chapter 16
● Updates related to the COVID-19 economic down-
turn that include the discussion of U.S. household
saving early in the chapter and the discussion of the
U.S. government deficit later in the chapter
● New Economic Naturalist, “Why have real interest
rates declined globally in recent decades?” that dis-
cusses the combination of higher global saving and
lower global investment that helps explain the
downward trend in real interest rates
Chapter 17
● New discussion of the Fed’s role in stabilizing finan-
cial markets and as lender of last resort, which took
center stage in recent episodes of financial panic;
the discussion covers Section 13(3) landing during
the 2008 and 2020 crises
● Updates related to recent U.S.-China trade frictions,
in the discussion of the saving rate and the trade
deficit
● Updates related to the COVID-19 pandemic and fi-
nancial markets
Chapter 18
● Updates related to the COVID-19 downturn
● Revised Economic Naturalist 18.3 that includes dis-
cussion of the gig economy in the context of the
natural rate of unemployment in the U.S.
● Revised Economic Naturalist 18.5 that discusses the
U.S. government’s response to the COVID-19 pan-
demic and covers details of the Coronavirus Aid, Re-
lief, and Economic Security (CARES) Act of 2020
and their economic rationale
● Other COVID-19-related updates
Chapter 19
● Updates related to COVID-19: in the context of
banks’ excess reserves, in the context of the Fed’s
quick cuts of the federal funds rate, in the context of
quantitative easing (QE) and the Fed’s special land-
ing in 2020, and in the context of the Fed’s return to
forward guidance in 2020; the chapter highlights the
unprecedented speed and severity of the pandemic’s
economic hit, and therefore the unprecedented
speed and size of the policy response
● Revisions throughout the chapter that reflect recent
developments in thinking about QE, forward guid-
ance, and other methods; when introduced in 2008,

these methods were viewed as “unconventional”
and “temporary”; the chapter now observes that
such methods are increasingly recognized as a “new
normal”
Chapter 20
● Updates to Economic Naturalist 20.5 to cover the
Fed’s unprecedented response to COVID-19
● Updated the chapter title to accurately reflect chap-
ter coverage
Chapter 21
● New Economic Naturalist, “What is a safe haven cur-
rency?” (such as the U.S. dollar, the Swiss franc, and
the Japanese yen), and how currencies tend to ap-
preciate in periods of uncertainty; includes specific
examples from the 2008 global financial crisis and
the 2020 global COVID-19 crisis
● Updated Economic Naturalist 21.5 that covers the
IMF’s COVID-19-related landing in early 2020
ORGANIZED LEARNING IN THE FOURTH
EDITION
Chapter Learning Objectives
Students and professors can be confident that the orga-
nization of each chapter surrounds common themes
outlined by four to seven learning objectives listed on
the first page of each chapter. These objectives, along
with AACSB and Bloom’s Taxonomy Learning Catego-
ries, are connected to all test bank questions and end-of-
chapter material to offer a comprehensive, thorough
teaching and learning experience. Reports available
within Connect allow instructors to easily output data
related to student performance across chapter learning
objectives, AACSB criteria, and Bloom’s Taxonomy
Learning Categories.
Assurance of Learning Ready
Many educational institutions today are focused on the
notion of assurance of learning, an important element of
some accreditation standards. Principles of Economics, A
Streamlined Approach, 4/e, is designed specifically to sup-
port your assurance of learning initiatives with a simple,
yet powerful, solution. Instructors can use Connect to
easily query for learning objectives that directly relate to
the objectives of the course and then use the reporting
features of Connect to aggregate student results in a sim-
ilar fashion, making the collection and presentation of
assurance of learning data simple and easy.
PREFACE xiii
AACSB Statement
The McGraw Hill Companies is a proud corporate mem-
ber of AACSB International. Recognizing the impor-
tance and value of AACSB accreditation, the authors of
Principles of Economics, A Streamlined Approach, 4/e, have
sought to recognize the curricula guidelines detailed in
AACSB standards for business accreditation by connect-
ing questions in the test bank and end-of-chapter mate-
rial to the general knowledge and skill guidelines found
in AACSB standards.
It is important to note that the statements contained
in Principles of Economics, A Streamlined Approach, 4/e,
are provided only as a guide for the users of this text.
A NOTE ON THE WRITING OF THIS
EDITION
Ben Bernanke was sworn in on February 1, 2006, as chair
and a member of the Board of Governors of the Federal
Reserve System, a position to which he was reappointed
in January 2010. From June 2005 until January 2006, he
served as chair of the President’s Council of Economic
Advisers. These positions have allowed him to play an ac-
tive role in making U.S. economic policy, but the rules of
government service restricted his ability to participate in
the preparation of previous editions. Since his second
term as chair of the Federal Reserve has completed, we
are happy to share that Ben is actively involved in the re-
vision of the macro portion of this edition.
ACKNOWLEDGMENTS
Our thanks first and foremost go to our portfolio direc-
tor, Anke Weekes, and our senior product developer,
Christina Kouvelis. Anke encouraged us to think deeply
about how to improve the book and helped us transform
our ideas into concrete changes. Christina shepherded
us through the revision process with intelligence, sound
advice, and good humor. We are grateful as well to the
production team, whose professionalism (and patience)
was outstanding: Christine Vaughan, lead content proj-
ect manager; Emily Windelborn, content project man-
ager; Matt Diamond, senior designer; and all of those
who worked on the production team to turn our manu-
script into the book you see now. Finally, we also thank
Bobby Pearson, marketing manager, for getting our mes-
sage into the wider world.
Special thanks to Peggy Dalton Verner, Frostburg
State University, for her energy, creativity, and help in
refining the assessment material in both the text and
Connect; Sukanya Kemp, University of Akron, for her
detailed accuracy check of the learning glass and
xiv PREFACE
e­ conomic naturalist videos; Alvin Angeles and team at
the University of California, San Diego, for their efforts
in the production and editing of the learning glass vid-
eos; and Kevin Bertotti and the team at ITVK for their
creativity in transforming Economic Naturalist examples
into dynamic and engaging video vignettes.
Finally, our sincere thanks to the following teach-
ers and colleagues, whose thorough reviews and
thoughtful suggestions led to innumerable substantive
improvements to Principles of Economics, A Streamlined
Approach, 4/e.
Mark Abajian, San Diego Mesa College
Richard Agesa, Marshall University
Seemi Ahmad, Dutchess Community College
Donald L. Alexander, Western Michigan University
Chris Azevedo, University of Central Missouri
Narine Badasyan, Murray State University
Sigridur Benediktsdottir, Yale University
Robert Blewett, St. Lawrence University
Brian C. Brush, Marquette University
Colleen Callahan, American University
Giuliana Campanelli Andreopoulos, William Paterson
University
J. Lon Carlson, Illinois State University
David Chaplin, Northwest Nazarene University
Joni Charles, Texas State University
Anoshua Chaudhuri, San Francisco State University
Nan-Ting Chou, University of Louisville
Maria Luisa Corton, University of South Florida–
St. Petersburg
Manabendra Dasgupta, University of Alabama at
Birmingham
Craig Dorsey, College of DuPage
Dennis Edwards, Coastal Carolina University
Tracie Edwards, University of Missouri–St. Louis
Roger Frantz, San Diego State University
Mark Frascatore, Clarkson University
Amanda Freeman, Kansas State University
Greg George, Macon State College
Seth Gershenson, Michigan State University
Amy D. Gibson, Christopher Newport University
Rajeev Goel, Illinois State University
Mehdi Haririan, Bloomsburg University of Pennsylvania
Susan He, Washington State University
John Hejkal, University of Iowa
Kuang-Chung Hsu, Kishwaukee College
Greg Hunter, California State University–Pomona
David W. Johnson, University of Wisconsin–Madison
Derek Johnson, University of Connecticut
Sukanya Kemp, University of Akron
Brian Kench, University of Tampa
Fredric R. Kolb, University of Wisconsin–Eau Claire
Daniel D. Kuester, Kansas State University
Valerie Lacarte, American University
Donald J. Liu, University of Minnesota–Twin Cities
Ida Mirzaie, The Ohio State University
Jelena Nikolic, Northeastern University
Anthony A. Noce, State University of New York
(SUNY)–Plattsburgh
Diego Nocetti, Clarkson University
Stephanie Owings, Fort Lewis College
Dishant Pandya, Spalding University
Martin Pereyra, University of Missouri
Tony Pizelo, Northwest University
Ratha Ramoo, Diablo Valley College
Thomas Rhoads, Towson University
Bill Robinson, University of Nevada–Las Vegas
Brian Rosario, University of California–Davis
Elyce Rotella, Indiana University
Jeffrey Rubin, Rutgers University
Naveen Sarna, Northern Virginia Community College
Sumati Srinivas, Radford University
Thomas Stevens, University of Massachusetts
Carolyn Fabian Stumph, Indiana University and Purdue
University–Fort Wayne
Markland Tuttle, Sam Houston State University
David Vera, California State University–Fresno
Nancy Virts, California State University–Northridge
Gilbert J. Werema, Texas Woman’s University
Elizabeth Wheaton, Southern Methodist University
William C. Wood, James Madison University
 sectors, benefit from free trade. Costaissues
Rican coffee
that might drinkers
be covered will be course,
in an introductory less enthusiastic,
but only limited time in
however, since they must now havewhich to to cover them. There’s no free lunch. Covering some inevitably means omit-
pay
ting others.
the higher world price of coffee, and can
therefore consume less. Thus domestic consumers
All textbook of forced
authors are exported goods
to pick and choose.are hurt that
A textbook by covered
free all
the issues would take up more than a whole floor of your campus library. It is our
trade.
DISTINGUISHING FEATURES
firm view that most introductory textbooks try to cover far too much. One reason
Free trade is efficient in the sense thatof it
that each increases
us was drawn to the the
studysize of theispie
of economics that aavailable tolist of
relatively short
the discipline’s core ideas can explain a great deal of the behavior and events we see
the economy. Indeed, the efficiencyin the of world
freearound
trade us. is an application
So rather than cover a largeof theofequilibrium
number ideas at a superficial
level, our strategy is to focus on this short list of core ideas, returning to each entry
principle: Markets in equilibrium leave no unexploited opportunities for individuals.
again and again, in many different contexts. This strategy will enable you to inter-
Despite the efficiency of free trade, nalizehowever, some groups
these ideas remarkably mayspanlose
well in the brief fromcourse.
of a single trade,And the
benefit of learning a small number of important ideas well will far outweigh the cost
which generates political pressuresofto block
having or arestrict
to ignore trade.
host of other, In the
less important next section we
ones.
will discuss the major types of policy used to restrict trade.
A second important element in our philosophy is a belief in the importance of
active learning. In the same way that you can learn Spanish only by speaking and
writing it, or tennis only by playing the game, you can learn economics only by doing
economics. And because we want you to learn how to do economics, rather than just
Economic The Economic Naturalist 11.1
to read or listen passively as the authors or your instructor does economics, we’ll
make every effort to encourage you to stay actively involved.
Naturalist For example, instead of just telling you about an idea, we’ll usually first motivate
the idea by showing you how it works in the context of a specific example. Often,
Examples and What is the China trade shock? these examples will be followed by self-tests for you to try, as well as applications that
show the relevance of the idea to real life. Try working the self-tests before looking up
the answers (which are at the back of the corresponding chapter).
Videos The China trade shock, a term most commonly associated with economists David Think critically about the applications: Do you see how they illustrate the point

Each Economic Natural-
ist example starts with a
Autor, David Dorn, and Gordon Hanson, is used to describe the dramatic change
being made? Do they give you new insight into the issue? Work the problems at the
end of the chapters and take extra care with those relating to points that you don’t
in international trade patterns that resulted from China’s rise as a major player in
fully understand. Apply economic principles to the world around you. (We’ll say

question to spark curios- the global economy over the past few decades. more about this when we discuss economic naturalism below.) Finally, when you
come across an idea or example that you find interesting, tell a friend about it.
You’ll be surprised to discover how much the mere act of explaining it helps you
ity and interest in learn- In a series of influential studies, these economists and their collaborators in- understand and remember the underlying principle. The more actively you can
ing an answer. These vestigated the costs of the shock to U.S. workers. They found that employment become engaged in the learning process, the more effective your learning will be.

examples fuel interest has fallen in U.S. industries and regions most exposed to import competition from
ECONOMIC NATURALISM
while teaching students China—something that our theory With in this chapter helps explain. However, they did
the rudiments of the cost-benefit framework under your belt, you are now in a
to see economics in the worldnot find strong evidence of simultaneous position to become offsetting employment
an “economic naturalist,” someone who increases
uses insights from in eco-
nomics to help make sense of observations from everyday life. People who have
around them. Videos of select and sectors in the same regions,
other suggesting that the transition of workers
studied biology are able to observe and marvel at many details of nature that would
® into
new Economic Naturalist exam-sectors in which the U.S.
⊲ Visit your has
instructor’s comparative
Connect otherwise haveadvantage
escaped their notice. has Forbeen
example,neither
on a walk inquick
the woods nor in early
course and access your eBook to April, the novice may see only trees. In contrast, the biology student notices many
ples are denoted in the margin of
easy—something that theviewtheory this video. does not emphasize.
different species of trees and understands why some are already in leaf while others
the material to which they pertain.Overall, these economists conclude still lie dormant. Likewise, the novice may notice that in some animal species males
that workers’ adjustment to trade shocks
are much larger than females, but the biology student knows that pattern occurs
They are housed within Connect
is often a slow and difficult process, only in and that
species local
in which maleslabor force
take several participation
mates. Natural selection ratesfavors larger
males in those species because their greater size helps them prevail in the often
with accompanying questions. andAunemployment rates in affected regions may take a decade or
bloody contests among males for access to females. In contrast, males tend more to re-to be
full list of Economic Naturalist ex- Moreover, the slow adjustment
cover. roughlymeansthe same size that tradein shocks
as females monogamous could
species, lead
in whichto pro-
there is much
less fighting for mates.
amples and videos can be found in economic and social problems in affected communities.
longed
the following pages. While the research underlying 8 CHAPTER 1 these
THINKING LIKEconclusions
AN ECONOMIST is still new and is still being
examined, it serves as a reminder that for many workers, the short-term costs of
Numbered Examples trade may outweigh the Eshort-term X A M P L E 1 . 3 benefits. Implicit CostWhile opposition to trade among
fra26395_ch01_001-030.indd 14 08/12/20 9:21 AM

Throughout the text, numbered and titled

such workers is understandable, we should Should not conclude
you use thatcoupon
your frequent-flyer thetooverall
fly to Cancuncosts of
for spring
break?
examples are referenced and tradecalled out tothe overall benefits. Rather,
outweigh as these economists conclude in one
With spring break only a week away, you are still undecided about whether to go
further illustrate concepts.of Our
their engaging
studies:
to Cancun with a group of classmates at the University of Iowa. The round-trip
airfare from Cedar Rapids is $500, but you have a frequent-flyer coupon you could
questions and examples from everyday life use for the trip. All other relevant costs for the vacation week at the beach total
exactly $1,000. The most you would be willing to pay for the Cancun vacation is

highlight how each human actionBetter understanding when and where

is the trade is costly, and how and why
$1,350. That amount is your benefit of taking the vacation. Your only alternative
use for your frequent-flyer coupon is for a trip to Boston the weekend after spring
it may be beneficial, is a key item onbreak
­result of an implicit or explicit cost-benefit theto attend
research agenda for trade and
your brother’s wedding. (Your coupon expires shortly thereafter.) If
the Cedar Rapids–Boston round-trip airfare is $400, should you use your

­calculation. labor economists. Developing effective tools for managing and mitigat-
frequent-flyer coupon to fly to Cancun for spring break?
The Cost-Benefit Principle tells us that you should go to Cancun if the benefits
ing the costs of trade adjustment should
of the tripbe high
exceed onIf not
its costs. the agenda
for the complicationfor
of thepoli-
frequent-flyer coupon,
solving this problem would be a straightforward matter of comparing
1
cymakers and applied economists. your benefit from the week at the beach to the sum of all relevant costs.
And because your airfare and other costs would add up to $1,500, or
$150 more than your benefit from the trip, you would not go to Cancun.
But what about the possibility of using your frequent-flyer coupon
to make the trip? Using it for that purpose might make the flight to Can-
Bkindler/E+/Getty Images

1 12 CHAPTER 1 THINKING LIKE AN ECONOMIST cun seem free, suggesting you’d reap an economic surplus of $350 by
David Autor, David Dorn, and Gordon Hanson, “The China Shock: Learning from Labor Market making the trip. But doing so also would mean you’d have to fork over
Adjustment to Large Changes in Trade,” Annual Review of Economics 8 (October 2016), pp. 205–240. $400 for your airfare to Boston. So the implicit cost of using your cou-
pon to go to Cancun is really $400. If you use it for that purpose, the
trip still ends up being a loser because the cost of the vacation, $1,400,
contexts, however, people seemexceeds morethe inclined to $50.
benefit by compare
In casesthe
likeaverage costmuch
these, you’re andmore
benefit
Is your flight to Cancun “free”
of travel
if you theonactivity. As Example 1.5likely
a frequent-flyer made clear,sensibly
to decide increasing
if you askthe level“Should
yourself, of anI activity may not
use my frequent-
flyer coupon for this trip or save it for an upcoming trip?”
be justified, even though its average benefit at the current level is significantly greater
coupon?

than its average cost.

We cannot emphasize strongly enough that the key to using the Cost-Benefit

SELF-TESTS Principle correctly lies in recognizing precisely what taking a given action pre-
vents us from doing. Self-Test 1.3 illustrates this point by modifying the details of
SELF-TEST 1.5 Example 1.3 slightly.
These self-test questions in the body
fra26395_ch11_261-280.indd 269 of the chap- Should a basketball team’s best player take all the team’s shots?
ter enable students to determine whether the SELF-TEST 1.3
A professional basketball team has a new assistant coach. The assistant
Refer to given information in Example 1.3, but this time your frequent-flyer cou-
preceding material has been understood and re- notices that one player scores on a higher percentage of her shots than other
pon expires in a week, so your only chance to use it will be for the Cancun trip.
players. Based on this information,
Should the assistant suggests to the head coach
you use your coupon?
inforce understanding before reading further. that the star player take all the shots. That way, the assistant reasons, the team
Detailed answers to the self-test questions are will score more points and win more games.
Pitfall 3: Failing to Think at the Margin
On hearing this suggestion, the head coach fires her assistant for incompe-
found at the end of each chapter. tence. What was wrong
When deciding whether to take an action, the only relevant costs and benefits are
with theoccur
assistant’s
those that would as a result ofidea?
taking the action. Sometimes people are influ-
enced by costs they ought to ignore. Other times they compare the wrong costs and
benefits. The only costs that should influence a decision about whether to take an action are
those we can avoid by not taking the action. Similarly, the only benefits we should consider
are those that would not occur unless the action were taken. As a practical matter, how-
ever, many decision makers appear to be influenced by costs or benefits R Ethat
CA would
P
THREE IMPORTANT DECISION PITFALLS xv
1. The pitfall of measuring costs or benefits proportionally. Many decision
makers treat a change in cost or benefit as insignificant if it constitutes
fra26395_ch01_001-030.indd 8 08/12/20 9:21 AM
only a small proportion of the original amount. Absolute dollar amounts,
 xvi DISTINGUISHING FEATURES

R 1 THINKING LIKE AN ECONOMIST

Recap
RECAP
COST-BENEFIT ANALYSIS Sprinkled throughout each chapter are Recap
Scarcity is a basic fact of economic life. Because of it, having more of one boxes that underscore and summarize the impor-
good thing almost always means having less of another. The Cost-Benefit tance of the preceding material and key concept
Principle holds that an individual (or a firm or a society) should take an action
if, and only if, the extra benefit from taking the action is at least as great as takeaways.
the extra cost. The benefit of taking any action minus the cost of taking the
action is called the economic surplus from that action. Hence, the Cost-
Benefit Principle suggests that we take only those actions that create addi-
tional economic surplus.

THREE IMPORTANT DECISION PITFALLS1

Rational people will apply the Cost-Benefit Principle most of the time, although
probably in an intuitive and approximate way, rather than through explicit and
precise calculation. Knowing that rational people tend to compare costs and bene-
Worked Problem Videos
fits enables economists to predict their likely behavior. As noted earlier, for exam-
ple, we can predict that students from wealthy families are more likely than others
Brief videos
to attend work
colleges through
that offer end-of-chapter
small classes. prob-
(Again, while the cost of small classes is
the same for all families, their benefit, as measured by what people are willing to
lems to aid in student understanding
pay for them, tends to be higher for wealthier families.)
of core
economic concepts
Yet researchers and offer
have identified situationsassistance with
in which people tend to apply the Cost-
Benefitchallenging
more Principle inconsistently.
material. In these
Thesituations,
videos the
areCost-Benefit
avail- Principle may
not predict behavior accurately. But it proves helpful in another way, by identifying
able as strategies
specific hints within Connect.
for avoiding bad decisions.

Pitfall 1: Measuring Costs and Benefits as Proportions

Rather Than Absolute Dollar Amounts
As the next example makes clear, even people who seem to know they should weigh
the pros and cons of the actions they are contemplating sometimes don’t have a clear
sense of how to measure the relevant costs and benefits.

1.2 Comparing Costs and Benefits

Should you walk downtown to save $10 on a $2,020 laptop

computer?
LEARNING GLASS VIDEOS
You are about to buy a $2,020 laptop computer at the nearby campus store when
Dozens of lecture
a friend tells videos
you that the featuring
same computer is onauthors Kate store for only
sale at a downtown
$2,010. If the downtown store is half an hour’s walk away, where should you buy
Antonovics
the computer?
and Ori Heffetz utilize learning
glass technology to provide you with an over-
Assuming that the laptop is light enough to carry without effort, the structure
view
of thisof important
example is exactlyconcepts. These
the same as that videos
of Example canonly difference is
1.1. The
® of the wireless
bethataccessed
the price ofas
the resources withinhigher
laptop is dramatically SmartBook
than the price
keyboard. As before, the benefit of buying downtown is the dollar amount you’ll
orsave,
as namely,
assignable content
$10. And because with the
it’s exactly questions
same trip, its via
cost also must be the
McGraw Hill Connect®.
1
The examples in this section are inspired by the pioneering research of Daniel Kahneman and the late
Amos Tversky. Kahneman was awarded the 2002 Nobel Prize in Economics for his efforts to integrate in-
sights from psychology into economics. You can read more about this work in Kahneman’s brilliant 2011
book, Thinking Fast and Slow (New York: Macmillan).

11/01/21 12:58 PM

xvi
ECON OM I C N ATUR A LI ST
VID E O S E R I ES
Behavioral Economics: Why do real estate agents often
show clients two nearly identical houses, even though one is
both cheaper and in better condition than the other?
Commercial Banking: Why can it be more expensive to
­transfer funds between banks electronically than it is to
send a check through the mail?
Comparative Advantage: Why are many products designed
in one place yet assembled in another?
Cost Benefit 1: Why does the light come on when you open
the refrigerator door but not when you open the freezer?
Cost Benefit 2: Why are child safety seats required in auto-
mobiles but not in airplanes?
Discount Pricing: Why might an appliance retailer hammer
dents into the sides of its stoves and refrigerators?
Economy Strength and Currency Value: Does a strong
­currency imply a strong economy?
Elasticity: Why do people buy the same amount of salt as
before even when the price of salt doubles?
Human Capital: Why do almost all countries provide free
­education?
Inflation: Can inflation be too low?
Inflation and Cost of Living: Do official inflation figures
overstate actual increases in our living costs?
Marginal Product of Labor: Why do female models earn so
much more than male models?
Menu Costs: Will new technologies eliminate menu costs?
Money and Its Uses: Is there such a thing as private, or
­communicably traded, money?
Monopolistic Competition: Why do we often see conve-
nience stores located on adjacent street corners?
Prisoner’s Dilemma: Why do people shout at parties?
Production Costs: Why are brown eggs more expensive than
white ones?
Saving: Why do American households save so little while
­Chinese households save so much?
Sources of Increasing Inequality: Why have the salaries of
top earners been growing so much faster than everyone
else’s?
Supply and Demand: Why are rotisserie chickens less
­expensive than fresh chickens?
Tariffs: Why do consumers in the United States often pay
more than double the world price for sugar?
The Demand for Money: Why does the average Argentine
­citizen hold more U.S. dollars than the average U.S. citizen?
The Invisible Hand: Why do supermarket checkout lines all
tend to be roughly the same length?
The Law of Demand: Why are smaller automobile engines
more common in Europe than in the United States?
The Optimal Amount of Information: Why might a patient
be more likely to receive an expensive magnetic resonance
­imaging (MRI) exam for a sore knee if covered under a con-
ventional health insurance rather than a health maintenance
organization (HMO) plan?
The Tragedy of the Commons and Property Rights: Why
do blackberries in public parks get picked before they’re
­completely ripe?
xvii
 EC ONOM I C NATUR A LIST
EXA M PLE S
1.1 Why do many hardware manufacturers include
more than $1,000 worth of “free” software with a
computer selling for only slightly more than that?
1.2 Why don’t auto manufacturers make cars without
­heaters?
1.3 Why do the keypad buttons on drive-up auto-
mated teller machines have Braille dots?
2.1 When the federal government implements a large
pay increase for its employees, why do rents for
apartments located near Washington Metro sta-
tions go up relative to rents for apartments located
far away from Metro stations?
2.2 Why do major term papers go through so many
more revisions today than in the 1970s?
2.3 Why do the prices of some goods, like airline tick-
ets to Europe, go up during the months of heavi-
est consumption, while others, like sweet corn, go
down?
2.4 Why was there a shortage of toilet paper during
the COVID-19 pandemic?
3.1 Why does California experience chronic water
shortages?
3.2 Why would Jeff Bezos live in a smaller house in
Manhattan than in Medina, Washington?
3.3 Why did people turn to four-cylinder cars in the
1970s, only to shift back to six- and eight-cylinder
cars in the 1990s?
3.4 Why are automobile engines smaller in England
than in the United States?
3.5 Why are waiting lines longer in poorer neighbor-
hoods?
3.6 Will a higher tax on cigarettes curb teenage
smoking?
3.7 Why was the luxury tax on yachts such a
disaster?
4.1 When recycling is left to private market forces,
why are many more aluminum beverage contain-
ers recycled than glass ones?
4.2 Why are gasoline prices so much more volatile
than car prices?
5.1 Why do supermarket checkout lines all tend to be
roughly the same length?
5.2 Are there “too many” smart people working as
corporate earnings forecasters?
6.1 Why does Intel sell the overwhelming majority of
all microprocessors used in personal computers?
6.2 Why do many movie theaters offer discount tick-
ets to students?
6.3 Why might an appliance retailer instruct its clerks
to hammer dents into the sides of its stoves and
refrigerators?
xviii
7.1 Why are cartel agreements notoriously unstable?
7.2 How did Congress unwittingly solve the television
advertising dilemma confronting cigarette
­producers?
7.3 Why do people shout at parties?
7.4 Why do we often see convenience stores located
on adjacent street corners?
8.1 Why did the American Olympic swimmer Shirley
Babashoff, who set one world record and six na-
tional records at the 1976 Olympics, refuse to ap-
pear on the cover of Sports Illustrated?
8.2 Why would people pay thousands of dollars to at-
tend a weight-loss camp that will feed them only
1,500 calories per day?
8.3 Why was Obamacare difficult to enact and is
harder still to repeal?
8.4 Why have attempts to privatize Social Security
proved so politically unpopular in the United
States?
8.5 If prosperous voters would be happier if they
spent less on positional goods and lived in envi-
ronments with more generously funded public
sectors, why haven’t they elected politicians who
would deliver what they want?
9.1 What is the purpose of free speech laws?
9.2 Why does the government subsidize private prop-
erty owners to plant trees on their hillsides?
9.3 Why do blackberries in public parks get picked
too soon?
9.4 Why are shared milkshakes consumed too quickly?
9.5 Why do football players take anabolic steroids?
10.1 Why is a patient with a sore knee more likely to
receive an MRI exam if he has conventional health
insurance than if he belongs to a health mainte-
nance organization?
11.1 What is the China trade shock?
11.2 Why did the U.S. start a trade war with China?
11.3 What is fast track authority?
13.1 Can nominal and real GDP ever move in different
directions?
13.2 Every few years, there is a well-publicized battle in
Congress over whether the minimum wage should
be raised. Why do these heated legislative debates
recur so regularly?
14.1 Why did West Germany and Japan recover so suc-
cessfully from the devastation of World War II?
14.2 Why did U.S. labor productivity grow so rapidly in
the late 1990s?
14.3 Why did medieval China stagnate economically?
14.4 Why do people work fewer hours today than their
great-grandparents did?

14.5 Why do far fewer children complete high school
in poor countries than in rich countries?
14.6 Why do almost all countries provide free public
education?
15.1 Can new technology hurt workers?
15.2 How did the COVID-19 pandemic affect the
demand for U.S. jobs?
16.1 How did many American households increase
their wealth in the 1990s and 2000s while saving
very little?
16.2 Why are racial and ethnic wealth disparities so
persistent?
16.3 Why do Chinese households save so much?
16.4 Why do U.S. households save so little?
16.5 Why have real interest rates declined globally in
recent decades?
17.1 From Ithaca Hours to Bitcoin: What is private
money, communally created money, and open-
source money?
17.2 Why did the banking panics of 1930–1933 reduce
the national money supply?
17.3 What happens to national economies during
banking crises?
17.4 Why did the U.S. stock market rise sharply and
fall sharply in the 1990s and again in the 2000s?
17.5 Why is the U.S. trade deficit so large?
18.1 Do economic fluctuations affect presidential
­elections?
18.2 How was the 2020 recession called?
18.3 Why has the natural rate of unemployment in the
United States declined?
18.4 Will new technologies eliminate menu costs?
18.5 Does military spending stimulate the economy?
18.6 Why did the federal government temporarily cut
taxes in 2001, 2009, and 2020?
ECONOMIC NATURALIST EXAMPLES xix
19.1 Why does the average Argentine hold more U.S.
dollars than the average U.S. citizen?
19.2 How did the Fed respond to recession and the
­terrorist attacks in 2001?
19.3 Why did the Fed raise interest rates 17 times in a
row between 2004 and 2006?
19.4 Why does news of inflation hurt the stock
­market?
19.5 Should the Federal Reserve respond to changes in
asset prices?
19.6 What is the Taylor rule?
20.1 How did inflation get started in the United States
in the 1960s?
20.2 Why did oil price increases cause U.S. inflation
to escalate in the 1970s but not in the 2000s and
2010s?
20.3 Why was the United States able to experience
rapid growth and low inflation in the latter part of
the 1990s?
20.4 How was inflation conquered in the 1980s?
20.5 Can inflation be too low?
21.1 Does a strong currency imply a strong economy?
21.2 What is a safe haven currency?
21.3 Why did the dollar appreciate nearly 50 percent in
the first half of the 1980s and nearly 40 percent in
the second half of the 1990s?
21.4 What were the causes and consequences of the
East Asian ­crisis of 1997–1998?
21.5 What is the IMF, and how has its mission evolved
over the years?
21.6 How did policy mistakes contribute to the Great
Depression?
21.7 Why have 19 European countries adopted a com-
mon currency?

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Comparison Guide
Principles of Economics, 8th edition Principles of Economics: A Streamlined Approach, 4th edition
Econ Micro Macro Streamlined Streamlined Streamlined
Chapter Title 8e 8e 8e Chapter Title 4e Econ 4e Micro 4e Macro
Thinking Like an Economist 1 1 1 Thinking Like an Economist 1 1 1
Comparative Advantage 2 2 2
Supply and Demand 3 3 3 Supply and Demand 2 2 2
Elasticity 4 4
Demand and Elasticity 3 3
Demand 5 5
Perfectly Competitive Supply 6 6 Perfectly Competitive Supply 4 4
Efficiency, Exchange, and the 7 7 Efficiency, Exchange, and 5 5
Invisible Hand in Action the Invisible Hand in Action
Monopoly, Oligopoly, and 8 8 Monopoly, Oligopoly, and 6 6
Monopolistic Competition Monopolistic Competition
Games and Strategic 9 9 Games and Strategic 7 7
Behavior Behavior
An Introduction to 10 10 An Introduction to Behavioral 8 8
Behavioral Economics Economics (NEW)
Externalities, Property 11 11 Externalities and Property 9 9
Rights, and the Environment Rights
The Economics of Information 12 12
Using Economics to Make
Labor Markets, Poverty, and 13 13 10 10
Better Policy Choices
Income Distribution
Public Goods and Tax Policy 14 14
International Trade and 15 15 16 International Trade and 11 11 12
Trade Policy Trade Policy
Macroeconomics: The Bird’s- 16 4 Macroeconomics: The Bird’s 12 3
Eye View of the Economy Eye View of the Economy
Measuring Economic Activity: 17 5
Measuring Economic Activity:
GDP and Unemployment
GDP, Unemployment, and 13 4
Measuring the Price Level 18 6
Inflation
and Inflation
Economic Growth, Productivity, 19 7 Economic Growth, Productivity, 14 5
and Living Standards and Living Standards
The Labor Market: Workers, 20 8 The Labor Market: Workers, 15 6
Wages, and Unemployment Wages, and Unemployment
Saving and Capital Formation 21 9 Saving and Capital Formation 16 7
Money, Prices, and the 22 10
Federal Reserve Money, the Federal Reserve,
17 8
Financial Markets and 23 11 and Global Financial Markets
International Capital Flows
Short-Term Economic 24 12
Short-Term Economic
Fluctuations: An Introduction
Fluctuations and Fiscal 18 9
Spending and Output in the 25 13
Policy
Short Run
Stabilizing the Economy: The 26 14 Stabilizing the Economy: The 19 10
Role of the Fed Role of the Fed
Aggregate Demand, 27 15 Aggregate Demand, 20 11
Aggregate Supply, and Aggregate Supply, and
Inflation Inflation
Exchange Rates and the 28 17 Exchange Rates and the 21 13
Open Economy Open Economy
xxv
 BR I EF C ONTE N TS

PART 1 Introduction
1 Thinking Like an Economist 1
2 Supply and Demand 31

PART 2 Competition and the Invisible Hand

3 Demand and Elasticity 65
4 Perfectly Competitive Supply 91
5 Efficiency, Exchange, and the Invisible Hand in Action 119

PART 3 Market Imperfections

6 Monopoly, Oligopoly, and Monopolistic Competition 141
7 Games and Strategic Behavior 169
8 An Introduction to Behavioral Economics 195
9 Externalities and Property Rights 217

PART 4 Economics of Public Policy

10 Using Economics to Make Better Policy Choices 241

PART 5 International Trade

11 International Trade and Trade Policy 261

PART 6 Macroeconomics: Issues and Data

12 Macroeconomics: The Bird’s-Eye View of the Economy 281
13 Measuring Economic Activity: GDP, Unemployment, and Inflation 299

PART 7 The Economy in the Long Run

14 Economic Growth, Productivity, and Living Standards 339
15 The Labor Market: Workers, Wages, and Unemployment 373
16 Saving and Capital Formation 403
17 Money, the Federal Reserve, and Global Financial Markets 435

PART 8 The Economy in the Short Run

18 Short-Term Economic Fluctuations and Fiscal Policy 475
19 Stabilizing the Economy: The Role of the Fed 507
20 Aggregate Demand, Aggregate Supply, and Inflation 545

PART 9 The International Economy

21 Exchange Rates and the Open Economy 579

xxvi
C ON T E N TS

PART 1 Introduction THE ECONOMIC NATURALIST 2.4 57

Summary 58 ▯ Key Terms 59 ▯ Review Questions 59 ▯
Chapter 1 Thinking Like an Economist 1 Problems 59 ▯ Answers to Self-Tests 60 ▯ Appendix: The
Algebra of Supply and Demand 63
Economics: Studying Choice in a World of Scarcity 2
Applying the Cost-Benefit Principle 3
Economic Surplus 4
Opportunity Cost 4 PART 2 Competition and the
The Role of Economic Models 5 Invisible Hand
Three Important Decision Pitfalls 6
Chapter 3 Demand and Elasticity 65
Pitfall 1: Measuring Costs and Benefits as Proportions
The Law of Demand 66
Rather Than Absolute Dollar Amounts 6
Pitfall 2: Ignoring Implicit Costs 7 The Origins of Demand 66
Pitfall 3: Failing to Think at the Margin 8 Needs versus Wants 67
Normative Economics versus Positive Economics 13 THE ECONOMIC NATURALIST 3.1 67
Economics: Micro and Macro 13 Applying the Law of Demand 68

The Approach of This Text 14 Substitution at Work 68

Economic Naturalism 14 THE ECONOMIC NATURALIST 3.2 68

THE ECONOMIC NATURALIST 3.3 69
THE ECONOMIC NATURALIST 1.1 15
THE ECONOMIC NATURALIST 3.4 70
THE ECONOMIC NATURALIST 1.2 15
The Importance of Income Differences 70
THE ECONOMIC NATURALIST 1.3 16
THE ECONOMIC NATURALIST 3.5 71
Summary 17 ▯ Key Terms 17 ▯ Review Questions 17 ▯
Problems 18 ▯ Answers to Self-Tests 19 ▯ Appendix: Working Individual and Market Demand Curves 71
with Equations, Graphs, and Tables 21 Horizontal Addition 71
Elasticity 73
Chapter 2 Supply and Demand 31
Price Elasticity of Demand 73
What, How, and for Whom? Central Planning Price Elasticity Defined 73
versus the Market 33 Determinants of Price Elasticity of Demand 75
Buyers and Sellers in Markets 34 Some Representative Elasticity Estimates 76
The Demand Curve 35 Using Price Elasticity of Demand 77
The Supply Curve 36 THE ECONOMIC NATURALIST 3.6 77
Market Equilibrium 38 THE ECONOMIC NATURALIST 3.7 77
Rent Controls Reconsidered 41 A Graphical Interpretation of Price Elasticity 78
Pizza Price Controls? 43 Price Elasticity Changes along a Straight-Line
Predicting and Explaining Changes in Prices Demand Curve 80
and Quantities 44 Two Special Cases 81
Shifts in Demand 45 Elasticity and Total Expenditure 82
THE ECONOMIC NATURALIST 2.1 47 Income Elasticity and Cross-Price Elasticity
Shifts in the Supply Curve 48 of Demand 86
THE ECONOMIC NATURALIST 2.2 51 Summary 87 ▯ Key Terms 87 ▯ Review Questions 88 ▯
Four Simple Rules 51 Problems 88 ▯ Answers to Self-Tests 89
THE ECONOMIC NATURALIST 2.3 54
Efficiency and Equilibrium 54 Chapter 4 Perfectly Competitive Supply 91
Cash on the Table 55 Thinking about Supply: The Importance of
Smart for One, Dumb for All 56 Opportunity Cost 92

xxvii
xxviii CONTENTS
Individual and Market Supply Curves 94
Profit-Maximizing Firms in Perfectly
Competitive Markets 95
Profit Maximization 95
The Demand Curve Facing a Perfectly
Competitive Firm 96
Production in the Short Run 97
Choosing Output to Maximize Profit 98
Price Equals Marginal Cost: The Seller’s Supply
Rule 101
Graphing Marginal Cost 101
The “Law” of Supply 103
Applying the Theory of Supply 104
THE ECONOMIC NATURALIST 4.1 104
Determinants of Supply Revisited 107
Technology 107
Input Prices 107
The Number of Suppliers 107
Expectations 108
Changes in Prices of Other Products 108
The Price Elasticity of Supply 108
Determinants of Supply Elasticity 111
THE ECONOMIC NATURALIST 4.2 112
Unique and Essential Inputs: The Ultimate Supply
Bottleneck 114
Summary 115 ▯ Key Terms 116 ▯ Review Questions 116
Problems 116 ▯ Answers to Self-Tests 117
Chapter 5 Efficiency, Exchange, and the
Invisible Hand in Action 119
The Central Role of Economic Profit 120
Three Types of Profit 120
The Invisible Hand Theory 123
Two Functions of Price 123
Responses to Profits and Losses 123
The Effect of Market Forces on Economic
Profit 125
The Importance of Free Entry
and Exit 126
The Invisible Hand in Action 127
THE ECONOMIC NATURALIST 5.1 127
Economic Rent versus Economic Profit 129
The Distinction between an Equilibrium and a
Social Optimum 130
Smart for One, Dumb for All 131
THE ECONOMIC NATURALIST 5.2 131
Market Equilibrium and Efficiency 132
The Cost of Preventing Price Adjustments 136
Summary 138 ▯ Key Terms 139 ▯
Review Questions 139 ▯ Problems 139 ▯
Answers to Self-Tests 140
PART 3 Market Imperfections
Chapter 6 Monopoly, Oligopoly, and
Monopolistic Competition 141
Perfect and Imperfect Competition 142
Different Forms of Imperfect Competition 142
The Essential Difference between Perfectly and
Imperfectly Competitive Firms 144
Five Sources of Market Power 145
Exclusive Control over Important Inputs 145
Patents and Copyrights 145
Government Licenses or Franchises 145
Economies of Scale and Natural Monopolies 146
Network Economies 146
Economies of Scale and the Importance of Start-Up Costs 147
THE ECONOMIC NATURALIST 6.1 150
Profit Maximization for the Monopolist 150
Marginal Revenue for the Monopolist 150
The Monopolist’s Profit-Maximizing Decision Rule 152
Being a Monopolist Doesn’t Guarantee
an Economic Profit 154
Why the Invisible Hand Breaks Down under
Monopoly 155
Using Discounts to Expand the Market 156
Price Discrimination Defined 157
▯
THE ECONOMIC NATURALIST 6.2 157
How Price Discrimination Affects Output 157
The Hurdle Method of Price Discrimination 160
Is Price Discrimination a Bad Thing? 163
Examples of Price Discrimination 163
THE ECONOMIC NATURALIST 6.3 164
Summary 165 ▯ Key Terms 166 ▯
Review Questions 166 ▯ Problems 166 ▯
Answers to Self-Tests 168
Chapter 7 Games and Strategic Behavior 169
Using Game Theory to Analyze Strategic Decisions 170
The Three Elements of a Game 170
Nash Equilibrium 172
The Prisoner’s Dilemma 174
The Original Prisoner’s Dilemma 174
The Economics of Cartels 175
THE ECONOMIC NATURALIST 7.1 175
Tit-for-Tat and the Repeated Prisoner’s Dilemma 177
THE ECONOMIC NATURALIST 7.2 178
THE ECONOMIC NATURALIST 7.3 179
Games in Which Timing Matters 180
Credible Threats and Promises 182
Monopolistic Competition When Location Matters 184
THE ECONOMIC NATURALIST 7.4 184

Commitment Problems 186
Solving Commitment Problems with Psychological
Incentives 188
Summary 190 ▯ Key Terms 190 ▯ Review Questions 191
Problems 191 ▯ Answers to Self-Tests 194
Chapter 8 An Introduction to Behavioral
Economics 195
Judgmental Heuristics or Rules of Thumb 196
Availability 196
Representativeness 197
Regression to the Mean 198
THE ECONOMIC NATURALIST 8.1 198
Anchoring and Adjustment 199
Misinterpretation of Contextual Clues 200
The Psychophysics of Perception 200
The Difficulty of Actually Deciding 200
Impulse-Control Problems 202
THE ECONOMIC NATURALIST 8.2 203
Loss Aversion and Status Quo Bias 205
THE ECONOMIC NATURALIST 8.3 206
Concerns about Relative Position 207
THE ECONOMIC NATURALIST 8.4 210
THE ECONOMIC NATURALIST 8.5 211
Summary 214 ▯ Key Terms 215 ▯ Review Questions 215
Problems 215 ▯ Answers to Self-Tests 216
Chapter 9 Externalities and Property
Rights 217
External Costs and Benefits 217
How Externalities Affect Resource Allocation 218
The Coase Theorem 219
Remedies for Externalities 223
Laws and Regulations 223
THE ECONOMIC NATURALIST 9.1 225
The Optimal Amount of Negative
Externalities Is Not Zero 225
Compensatory Taxes and Subsidies 226
THE ECONOMIC NATURALIST 9.2 226
Property Rights and the Tragedy of the Commons 227
The Problem of Unpriced Resources 227
The Effect of Private Ownership 229
When Private Ownership Is Impractical 230
THE ECONOMIC NATURALIST 9.3 230
THE ECONOMIC NATURALIST 9.4 231
Positional Externalities 232
Payoffs That Depend on Relative Performance 232
THE ECONOMIC NATURALIST 9.5 232
Positional Arms Races and Positional
Arms Control Agreements 234
CONTENTS xxix
Social Norms as Positional Arms Control
Agreements 235
Summary 237 ▯ Key Terms 237 ▯ Review Questions 237 ▯
▯ Problems 238 ▯ Answers to Self-Tests 239
PART 4 Economics of Public Policy
Chapter 10 Using Economics to Make Better
Policy Choices 241
The Economics of Health Care 242
The Case for Mandatory Immunization Laws 242
Explaining Rising Health Care Costs 243
Designing a Solution 244
The HMO Revolution 245
THE ECONOMIC NATURALIST 10.1 245
The Problem with Health Care Provision
through Private Insurance 246
The Affordable Care Act of 2010 247
Using Price Incentives in Environmental
Regulation 248
Taxing Pollution 248
Auctioning Pollution Permits 250
Climate Change and Carbon Taxes 252
Methods of Income Redistribution 253
Welfare Payments and In-Kind Transfers 254
▯ Means-Tested Benefit Programs 254
The Negative Income Tax 255
Minimum Wages 255
The Earned-Income Tax Credit 256
Public Employment for the Poor 256
A Combination of Methods 256
Summary 258 ▯ Key Terms 258 ▯
Review Questions 258 ▯ Problems 258 ▯
Answers to Self-Tests 259
PART 5 International Trade
Chapter 11 International Trade and Trade
Policy 261
Comparative Advantage as a Basis for Trade 262
A Supply and Demand Perspective on Trade 266
Winners and Losers from Trade 268
THE ECONOMIC NATURALIST 11.1 269
Protectionist Policies: Tariffs and Quotas 270
Tariffs 270
Quotas 272
THE ECONOMIC NATURALIST 11.2 275
The Inefficiency of Protectionism 276
THE ECONOMIC NATURALIST 11.3 276
Summary 277 ▯ Key Terms 278 ▯ Review Questions 278 ▯
Problems 278 ▯ Answers to Self-Tests 280
Another random document with
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The susceptibility of different persons to this drug is so different that
the dose should first be as small as 1/400 gr., but this may be repeated
every three hours, and gradually increased to 1/100 gr., or until its
physiological effects are felt. Patients must sometimes be kept under
its influence for weeks together.25 It is, however, a remarkable fact
that occasionally a few full doses will secure an immunity from pain
for a long period. Although most useful in facial neuralgias, the writer
has known it to be effective in brachial and mammillary neuralgia.
Aconitia can now be had in granules of 1/400 gr., or can be given in
alcoholic solution.
25 See Seguin, Arch. of Med., vol. vi., 1881.

Gelsemium is also occasionally very useful in facial and even in

intercostal neuralgia, and is said to be of special service in the
neuralgia due to carious teeth. The commencing dose of the fluid
extract is five minims, which may be gradually increased to twenty,
or until a slight degree of muscular prostration, ptosis, or dilatation of
the pupil is induced.

The use of phosphorus has been revived of late years, chiefly

through the efforts of J. Ashburton Thompson, and it is at least
occasionally of service. Success is said to be best obtained by full
doses (about 1/20 gr. every three or four hours, up to 1/5 or 1/4 gr. daily
for some days), watch being kept for signs of gastric irritation. The
best preparation is an alcoholic solution (Thompson's), such as the
following:

Rx. Phosphorus, gr. j;

Abs. alcohol, fluidrachm vi.
Dissolve with heat.
Glycerin, fluidounce iss;
Alcohol, fluidrachm ij;
Spts. peppermint, minim v.
One teaspoonful represents gr. 1/20.
Electricity, if properly used, is capable of temporarily, and even
radically, relieving the neuralgic state. The forms most often
employed are faradic and galvanic electricity, though frictional
electricity has also been coming into use of late, mainly as a
substitute for faradism. The galvanic current is by far the most
efficacious of all. This probably acts mainly by directly inducing
better nutritive and better functional conditions in the nerves and
nerve-centres, but the fact that it is often of use in cases of
undoubted neuritis seems to indicate that it may also influence the
grosser structural changes in the affected parts, if such are present.
It is impossible to explain its action more exactly, and the teachings
of physiological experiments do not lend us much aid.

It is probably not of much consequence which pole is used in the

neighborhood of the affected nerve. It should be remembered that
the peripheral nerve-trunks are so deeply buried that the electrodes
cannot be directly applied to them, as they are to the exposed nerve
of a frog in the laboratory, and, further, that instead of being isolated
they are surrounded with tissues of good conducting power, into
which the current must rapidly flow off. For these reasons the nerve
near which either electrode is applied is virtually exposed to the
action of both poles in almost equal degree; and although it is more
customary to use the positive pole in the neighborhood of parts
which are considered to be in a state of irritation, yet clinical
experience has not justified the conversion of this custom into a rule.
Neither is the direction of the current of material consequence.

It is, however, very important in acute cases to take care that the
current-strength should not be rapidly changed; and for this reason
the electrode should be drawn slowly to a distance from the nerve
before it is removed, or left in situ while the current is gradually
diminished by a suitable rheostat. As a rule, the former method is the
more practicable.

In the treatment of acute cases moderate currents and short

applications, frequently repeated, are the best. On the other hand, in
cases of long standing, especially cases of sciatica, strong currents
are sometimes more effective, and even interruptions and reversals
of the current may be in place.

The choice of a battery is not a matter of indifference. Any stationary

battery of high interior resistance will answer the purpose, but most
of the portable (zinc-carbon) batteries in common use are
objectionable,26 for the reason that their interior resistance is so low
in proportion to that of the body that it may almost be counted out as
a factor in determining the strength of the current. The latter is liable
to rise, therefore, quite suddenly as the resistance of the body—i.e.
the vascularity of the skin—becomes modified. This objection is
obviated if a large, constant resistance (water or graphite rheostat) is
attached to the battery and kept always in the main circuit.
26 Archives of Medicine, April, 1884.

Faradism probably owes its efficiency to the indirect effects of

stimulation of the sensitive nerves of the skin. This may be produced
either by the wire brush, which causes a sharp irritation and
reddening, and is to be compared with the counter-irritants, or by the
milder application of a moist or dry electrode or the hand of the
operator. The latter procedure may be compared to the superficial
manipulation which is sometimes so grateful, especially in nervous
headaches.

The value of electricity as a general tonic should be remembered in

this connection.

Hydropathy.—Douches and baths of various kinds have doubtless

proved of much value in the treatment of neuralgia. The majority of
them, however, are difficult of application for the general practitioner,
and we confine ourselves to mentioning the tonic and soothing
action of the wet pack and of the prolonged warm bath, which should
be followed by sponging with cool water, and used under every
possible precaution against exposure.

Long-continued local applications of gentle heat (bags of sand or

salt, or hot water) are often temporarily grateful, and in the treatment
of chronic cases the daily application of hot water or ice-bags to the
spine is said to have a good effect. In acute and subacute neuritis,
and in those forms of neuralgia in which neuritis plays a large part,
such as sciatica, the persistent application of ice-bags along the
course of the affected nerve, even for days together, is sometimes of
great service. Even where we cannot be sure that neuritis is present,
long-continued applications of ice may be of use, but alternations of
cold and heat, on the other hand, are usually to be carefully avoided.
This treatment is safer in chronic than in acute cases, though it may
be useful in either.

Counter-irritation.—A spray of ether may be substituted for ice when

only a temporary chilling is desired, for its counter-irritant effect. This
has even been used on the face, the eye being protected by some
suitable covering, and a good deal of benefit is to be hoped for both
from this and from the similar use of chloride of methyl.

Debove27 has found the chloride of methyl, used in this manner,

singularly effective in the treatment of sciatica. A considerable and
long-continued counter-irritation is thus made over a large surface
and without great pain. The neuralgia is said to be greatly relieved
and a rapid cure sometimes affected.
27 Bulletin générale de Thérap., cited in the Boston Med. and Surg. Journ., vol. cxii. p.
210.

Counter-irritation is also practised by making applications of

cutaneous irritants, such as blisters, mustard, turpentine, chloroform,
or of the actual cautery carried in light superficial stripes over the
skin, and repeated if necessary at short intervals. As a rule, the
counter-irritation is more effective the larger the surface which is
covered.

The use of the cautery and of blisters is in place in almost every form
of neuralgia where the temporary disfigurement is of no
consequence.
Of other cutaneous applications, aconite and chloroform liniments,
menthol in substance or in alcoholic solution (drachm j or drachm ij
to fluidounce j), aconite and veratrine ointments, are the most useful.
A strong aconitine ointment, made with Duquesnet's aconitia and
lard (drachm j to ounce j), has been recommended by Webber28 to
be used in portions of the size of half a split pea, but, though
effective, it needs to be employed with great caution.
28 Nervous Diseases, Boston, 1885.

These applications act in part as irritants, by keeping up a play of

sensitive impressions in virtue of the lodgment which they effect in
the skin, but also, no doubt, by reducing the sensitiveness of the
cutaneous nerve-fibres, and thus removing one source of excitation
of the diseased nervous centres. The remarkable temporary benefit
sometimes obtained from the instillation of cocaine into the eye in
cases of neuralgia of the ophthalmic division of the fifth nerve bears
testimony in favor of this explanation.

Surgical operations for neuralgia are of three kinds—section

(neurotomy), removal of a piece of nerve (neurectomy), and nerve-
stretching. The two former operations are of course rarely practised,
except upon the purely-sensitive fifth pair of nerves, the latter upon
mixed nerves also.

Neurectomy is now almost always substituted for simple neurotomy,

and sometimes still more effective means are taken to prevent the
reunion of the nerve, such as doubling over the cut end, destroying
the nerve throughout the length of the bony canal in which it lies, and
even plugging the canal with cement.29
29 Heustis (Med. News, Dec. 8, 1883) found that the infraorbital nerve could be
readily drilled out with a piece of piano wire.

The inconvenience following nerve-section is as nothing compared

to the pain of a severe and intractable neuralgia. It has rarely
happened that the disease has been increased by the operation, and
under proper antiseptic precautions the surgical risks are not great.
There is some chance of permanent cure, and a much greater
chance of securing an immunity from pain for a long period.

It is important to remember that when the neuralgia occupies the

distribution of several branches of the fifth nerve, an operation on the
one primarily or most severely affected may relieve the pain in all.
On the other hand, the converse may be true,30 inasmuch as the
same district is supplied by recurrent fibres from several different
sources. Before any operation is decided on it should be
remembered that even in apparently desperate cases of trigeminal
neuralgia the persistent and thorough use of tonic and other
remedies may in the end be crowned with success, perhaps at the
moment when it is least expected.
30 Cartaz, Des névralgies envisagés au point de vue de la sensibilité récurrente.

During the past few years the operation of nerve-section has been to
some degree superseded by that of nerve-stretching, as being less
serious in its immediate (though not necessarily in its remote)
consequences, and sometimes more efficacious. Hildebrandt,
indeed, raises the question whether the traction which is apt to be
exerted when a nerve is cut is not an important element in bringing
about the result. On the other hand, cases are reported where
neuralgia which had not been relieved by stretching was cured by
resection.31
31 Nocht, Ueber die Gefolge der Nerven-dehnung.

The best showing for the operation is in the treatment of sciatica, but
most of the other superficial nerves, including the intercostals, have
been successfully treated in the same manner.

On the other hand, this treatment is not without its dangers. Apart
from the risks of the operation itself, cases have been reported in
which the spinal cord has been injured, so that chronic myelitis has
been set up, and a greater or less degree of paralysis—rarely
permanent, it is true—may be induced by the direct injury to the
nerve.
This means of treatment is therefore certainly to be thought of in
serious and obstinate cases, but not lightly decided on.

A substitute operation for sciatica is the so-called bloodless

stretching, in which, the patient having been etherized, the thigh is
forcibly flexed on the pelvis, and then the leg extended on the thigh
and the foot on the leg (dorsal flexion), and held for a short time in
this position. A very material degree of stretching of the sciatic nerve
is doubtless possible in this way, and a number of cures have been
thus effected. But, though less dangerous than the stretching of the
exposed nerve, this operation is not a trifling one.

In one case of sciatica the writer has seen a neuritis of some severity
lighted up by this operation, perhaps because the disease was in too
active a state, although it had lasted some months. The operation is
probably most indicated in chronic cases.

The anatomical effects of nerve-stretching are manifold. Nerve-fibres

are usually destroyed in greater or smaller number, and the
conducting power of the nerve correspondingly impaired. Small
blood-vessels are broken and the circulation and nutrition of the
nerve-trunks altered, and it is probable that adhesions in and around
the nerve-sheaths, where such exist, are severed. The nerve-fibres
ramifying in the inflamed sheaths of the large trunks may also be
ruptured, and it may be that the displacement of the fluid contents of
the nerve brings about better nutritive conditions.32 It is also probable
that the operation either directly or indirectly affects the nutrition of
the nerve-centres,33 and although this is not without its dangers, the
chances are in favor of a beneficial result.
32 See “Die Rückenmarks-dehnung,” Hegar, Samml. klin. Vorträge, 239.

33 Hegar, loc. cit.

Another means of directly acting on neuralgic nerves is by

subcutaneous injections of water, chloroform, ether, osmic acid,
nitrate of silver, and other substances. The deep injection of water
over the affected nerve is attended with but little danger, and is
occasionally successful. The similar use of chloroform, in doses of
15 to 30 minims, is much more often effective, but sometimes
causes great pain, and even abscess. It has been mainly used in
sciatica, also in other neuralgias, even those of the fifth pair. In this
case the injection is best made through the buccal mucous
membrane. This treatment is not without danger of causing collapse,
or even death, probably due to the wounding of a small vein. In one
case of sciatica treated by the writer the chloroform probably entered
the nerve itself to some extent, as the injection was followed by very
severe pain lasting for several hours, and eventually by some degree
of muscular wasting. The neuralgic pain, which had continued
obstinately for a long period, was, however, cured, and had not
returned at the end of some days, when the patient was lost sight of.

Osmic acid has been used recently in the same way, and the reports
show about an equal number of successes and failures. The dose is
about 8 minims of a 1 per cent. solution, and the injection may be
repeated at intervals of a few days. It has been used successfully in
various parts of the body, including the face and the fingers. The
injection causes no great pain, but occasionally, though rarely,
excites abscess.

Under the general heading of massage a number of manipulations

may be grouped which are of value in the treatment of neuralgia,
even of long-standing cases of sciatica and the like.34 When, as
often happens in the case of sciatica, the nerve is the seat of
congestion and exudation, strong and deep kneading along its
course, with vigorous stroking upward in the direction of the lymph-
vessels, is the important part of the treatment. Besides this, however,
the prolonged and gentle manipulation of the painful region may
greatly relieve the patient for a time, apparently by acting on the
sensitive nerves and exerting a sort of inhibitory action, in which it is
not at all impossible that an influence upon the attention analogous
to that of Braidism plays a part.
34 See Reibmayr, Die Massage, etc., Wien, 1883.
A striking instance of the effect of this treatment is seen in the case
of nervous headaches, which are often very greatly relieved by a
series of gentle, monotonous movements of the finger-tips, as well
as by the domestic remedy of gently and persistently combing or
brushing the patient's hair. A still more efficient application of a
similar kind is the regular vibration communicated by a large magnet
or by the instrument devised by Mortimer Granville. A thoroughly
satisfactory explanation of the action of this treatment is yet to be
furnished.

There is no doubt that in the treatment of neuralgia a persistent and

thorough use of the remedies suggested is usually the key to
success. Nevertheless, special cases are sometimes reached by
special means of treatment, and the following are appended as
occasionally useful: Ammonio-sulphate of copper (grs. ij-vj, taken in
divided doses in the course of the day); salicylate of soda, in full
doses; caffeine; tonka (fluidrachm j of the fluid extract at repeated
intervals of a few hours); oil of turpentine; muriate of ammonia.

Special Forms of Neuralgia.35

35 Consult, in connection with this subject, the sections on Symptomatology and

Treatment.

MIGRAINE AND PERIODICAL HEADACHE.—In many of the recent treatises

upon nervous disease migraine and headache are removed from the
category of the neuralgias and placed in that of the functional
affections of the sympathetic vaso-motor system of nerves. This
classification is based upon the fact that in many of these cases
marked vascular changes—congestion or anæmia, as the case may
be—are observed in the external tissues of the affected parts, while
the sensations of the patient often lead us to infer the presence of
similar conditions within the cranium. The pain and the other
symptoms of the outbreak, it is thought, are due to the changes in
blood-tension in the cortex cerebri or in the region of expansion of
sensitive nerves, or, in part, to the spasm of the muscular walls of
the vessels themselves. This theory is seductive from its appearance
of pathological simplicity and exactness, but the writer believes, with
Anstie, Latham, Allbutt, and other observers, that it is not borne out
by clinical experience, and that its adoption tends to cloak the wider
relationship that exists between the sensory neuroses.

Migraine, nervous headache, and the superficial and the visceral

neuralgias hardly differ more fundamentally from each other than
individual cases of either affection differ among themselves. It is not
improbable, as we have seen, that all the phenomena of some
neuralgic attacks are wholly or in part the expression of irritation of
the sensory nervous system from without; but in many cases, on the
other hand, the signs of the neurosal tendency are clearly marked,
and there is hardly one of the symptoms of a typical migraine of
which the analogue may not be found, though perhaps faintly
pronounced, in one or another form of superficial neuralgia, while the
relation of both to the whole family of the neuroses is still more
clearly evident.

Migraine is a disease of youth and middle life, characterized, in its

most typical form, by attacks of severe headache of a few or many
hours' duration, of gradual onset and decline, ushered in by well-
marked auras involving one or more of the cerebral functions, and
terminating in nausea or vomiting or profuse secretion of pale urine,
or in some other critical nervous outbreak. The pain is usually, but
not invariably, deep-seated. It may be confined to one side of the
head, most often the left, or may involve both sides, either from the
outset or in the course of the attack. The forehead or temple is
usually the first part to become painful, but in severe or prolonged
seizures the parietal and occipital regions are prone to be affected
likewise.

The auras are manifold and important. On the day before an attack
the patient may feel remarkably well, or may complain only of such
sensations as thirst or giddiness. The attack itself is apt to be
ushered in by visual hallucinations of dazzling and vibrating points or
serrated images, sometimes with prismatic outlines, accompanied by
a loss or obscuration of vision over one-half or some other portion of
the field, which lasts half an hour or more, and sometimes clearing
up in one part while it advances in another. Simultaneously or
immediately after this there may be tingling and a sense of
numbness of the tongue, lips, hand, or one-half of the body,
sometimes followed by partial hemiparesis, and, if the right side be
affected, by more or less aphasia or mental confusion. Occasionally
the other special senses are affected. Sometimes the aura may
constitute the whole of the seizure.

The writer has observed a case in which migraine was represented

throughout boyhood by repeated attacks of subjective numbness
and tingling of the entire right side of the face, the right arm, and the
right half of the body, with aphasia and hemianopsia, followed during
many years by trifling headache or none at all; later in life by severe
pain. Here migraine as well as neuralgia in other forms was a well-
marked family disease.

These auras are especially worthy of notice, because they

occasionally point to epilepsy, an affection with which migraine is
allied.

The pain may begin on the same side with these prodromal
symptoms or on the opposite side. Sometimes drowsiness is a
marked symptom throughout the attack, and this differs in
significance from the sound, refreshing sleep with which the
paroxysm often comes to an end. Sometimes the arteries of the
affected side seem strongly contracted, as shown by pallor and
coldness of the face and dilatation of the pupil (angio-tonic form);
sometimes, on the other hand, they are dilated and pulsate strongly,
or the latter condition may follow the former (angio-paralytic form).
The radial pulse may show corresponding modifications. These
vascular phenomena are often, however, entirely wanting.

Migraine appears to be slightly more common in women than in

men. The liability to the attacks often shows itself in extreme youth,
usually increases at puberty, and generally ceases at the age of forty
or fifty. The attacks sometimes recur at regular intervals of a week, a
month, etc., but, on the other hand, they may remain absent for
years unless brought on by some exciting cause.

ETIOLOGY AND CLINICAL RELATIONS.—Migraine is a directly inheritable

disease, and one which stands in a close relationship to the other
grave neuroses, as well as to the neuropathic temperament. Cases
are occasionally seen in which the migraine of youth gives place to
epilepsy in later years. It is often met with also in families and
individuals of neuralgic tendency, and in fact it shades off into
neuralgia of the fifth and occipital nerves on the one hand and into
periodic nervous headaches on the other. It frequently occurs in
gouty persons, and is thought to be related to the brow ague of
malaria. The attacks may be brought on by any of the causes which
depress the vitality of the nervous system, and by various special
irritations, among which errors of refraction are prominent.

The PROGNOSIS is unfavorable in well-marked cases, in which the

habit of regular recurrence is established, and where the neuropathic
predisposition is pronounced and no special exciting cause can be
found. On the other hand, there are many cases where the tendency
is less deeply rooted, and where with the removal of the exciting
cause or causes the outbreaks cease.

Finally, there is great probability that the disease will cease of itself
with advancing years, not always, however, without having left its
mark on the patient's mental and bodily vitality.

The TREATMENT should be directed first to the detection and removal

of special sources of irritation, whether in the eye, stomach, uterus,
or elsewhere. Causes of anxiety and mental strain should be as far
as possible avoided, and great caution enjoined in the use of
stimulants and narcotics. The nutrition should be maintained at its
highest level by tonics, and, if need be, by electricity, massage, and
hydropathy. Sometimes, besides this a special diet is advisable, for it
seems beyond question that some patients have fewer headaches if
they abandon all animal food, while others—whether because of a
gouty tendency is not clear—do best on a nitrogenous diet with
exclusion of sugar and starch.

Of the drugs used to control the liability to the attacks, the most
important is cannabis Indica, given in doses of about half a grain of a
good preparation of the extract several times daily for weeks or
months together. Valerianate of zinc and the iodide and bromide of
potassium in full doses are also recommended, but are less
efficacious.

In the treatment of the attack itself, besides absolute rest and quiet,
large and repeated doses of guarana or caffeine, either alone or
combined with drachm doses of bromide of potassium, are
sometimes of use if given at the very outset.

It is thought by some observers that ergot or ergotin is of value if the

vessels are dilated, and conversely nitrite of amyl or glonoine if they
are contracted. It must not be forgotten, however, in case of doubt,
that the throbbing due to the latter drugs may increase the pain.

The writer has known a strong faradic current applied with the
moistened hand to the back of the neck to relieve an attack, and
prolonged but gentle manipulation of the painful area with the finger-
tips may have a like effect if the pain is not too severe; as, for
example, toward the end of a paroxysm.

Neuralgias of the Fifth Nerve.

Three varieties of these neuralgias may conveniently be

distinguished:

1. Ordinary facial neuralgia, analogous to the neuralgias of the

other superficial nerves;

2. Intermittent supraorbital neuralgia, sometimes called brow

ague, though by no means always of malarial origin;
 3. Epileptiform neuralgia (tic douloureux).

These varieties are of course closely allied, and have many features
and causes in common.

THE ORDINARY FACIAL NEURALGIA is a painful and obstinate malady,

although not so serious as the typical tic douloureux. The pain may
remain fixed in one position or it may shift from one part of the face
to another; and the latter is especially common in those forms which
occur in anæmic or ill-nourished persons. It associates itself readily
with occipital neuralgia, and sometimes also with neuralgia of the
pharynx and other parts. It occurs most often in persons of neurotic
tendencies or impaired nutrition, and may be provoked by disorders
of the ears, teeth, and even distant organs. The possibility of
aneurisms of the internal carotid or of cerebral tumor should also be
borne in mind, and signs of herpes zoster and locomotor ataxia
carefully sought for.

The relation of caries of the teeth to neuralgia of the fifth pair forms a
very important chapter, which is admirably treated by J. Ferrier.36
Opinions on this subject are conflicting and unsatisfactory, and the
fact that many patients have had nearly all their teeth drawn in the
vain attempt to get cured of one of the severe forms of facial
neuralgia often creates an impatience of further investigation in the
matter. Ferrier points out that as a rule it is not the severest cases of
epileptiform tic douloureux that arise in this way, but, on the other
hand, that it is a mistake to conclude, because a neuralgia is
benefited by medical treatment and made worse by fatigue,
exposure, etc., and because it occurs in a person of neurotic
temperament, that it is not likely to be due to this form of irritation.
The teeth need not themselves be the seat of pain, and the disease
in them may be detected only after diligent search.
36 Les Névralgies reflexes d'Origine dentaires, Paris, 1884.

The most important lesions are said to be caries, exostosis, and

other affections involving the pulp-cavity, exposure of the sensitive
dentine, ulcerations of the gums, injuries caused in extraction, and
other diseases of the alveolar process. The wisdom tooth, by its
pressure on other roots and on the gums, is not infrequently the one
at fault.

Chronic inflammation of the mucous membrane of the nose or

pharynx is said to be an occasional cause of neuralgia of the face,
as well as of the upper portions of the body.

THE INTERMITTENT NEURALGIA OF THE SUPRAORBITAL is an interesting

affection to which too little attention has been paid. One variety
seems to bear a certain relationship to migraine, inasmuch as it
occurs under similar circumstances—i.e. in distinctly neuropathic
individuals and families, and in attacks of about the same duration
and periodicity of recurrence.

Another variety approaches the other neuralgias in the longer

duration of the attacks, but is characterized by a daily seizure which
recurs with absolute regularity, coming on usually at about nine in
the morning and increasing in severity for an hour or so, then
persisting unchanged until midday or later, when it gradually
diminishes, finally disappearing in the course of the afternoon. As a
rule, it is brought on by catarrh of the frontal sinuses, often following
an acute attack of coryza. A certain amount of neurosal
predisposition is often found in this form, and the first attacks may
show themselves in early youth, rarely in the decline of life. The
writer has seen one family in which a number of members in at least
two generations have been attacked in this way, the seizures having
been brought on by exhaustion or coryza, or both combined.

This form of neuralgia is often greatly controlled by quinine if given in

sufficiently large doses (15 to 20 or 25, or even 30, grains) and as
long as four hours before the attack.

Lange37 thinks the action of galvanism is remarkably successful, but

the writer's experience does not fully bear this out.
37 Cited in the Centralbl. für Nervenheilkunde, etc., 1881, p. 10.
Seeligmüller38 speaks very highly of the effect of the nasal douche,
used for the sake of curing the catarrh of the frontal sinuses, and
potassic iodide may be useful by rendering the secretions more fluid.
38 Centralbl. für Nervenheilkunde, etc., June 1, 1880.

THE EPILEPTIFORM FACIAL NEURALGIA, OR TIC DOULOUREUX, is a chronic

affliction, characterized by the suddenness of onset and the severity
of its paroxysms of pain, which may recur every few minutes with
lightning-like rapidity, either spontaneously or brought on by motion
of the jaw or the taking of food, and disappear again as quickly. After
a group of such paroxysms as this there may be an intermission of
some hours or days. During the attack the patient is apt to rub the
seat of pain with great violence. The path pursued by the darts of
pain may be either in the direction of the nerve-trunks or in an
irregularly inverse direction.

In spite of their sufferings, these patients may present an

appearance of health. In its worst forms, and especially in advanced
life, this variety of neuralgia may be incurable, and at the best it is
sure to tax the care and skill of the physician. Anstie thinks that it is
apt to be associated with a taint of insanity.

The best TREATMENT consists in the most painstaking attention to

hygiene, in the persistent use of galvanism, arsenic, cod-liver oil,
quinine, aconite (see under General Treatment), and phosphorus.
Croton chloral is occasionally of service.

As a last resort, surgical measures (see above) may be appealed to,

but it should be borne in mind that even when the prospect seems
most hopeless the relief under medicinal and hygienic treatment may
really be near at hand. Where section of nerves is without result, the
operation of tying the larger vessels, the carotid or vertebral, on the
affected side may be tried, and offers some chance of success.

OCCIPITAL AND CERVICO-OCCIPITAL NEURALGIAS are second only to

trigeminal neuralgia in severity, though, fortunately, less common,
and either is liable by extension to give rise to the other.
Neuralgic pains in the occipital region may attend Potts's disease of
the cervical vertebræ; and this is especially important to bear in mind
because the osseous deformity is often wanting for a long time.

The writer has known a persistent pain in this region to be due to

intracranial syphilitic disease, and to cease suddenly with the advent
of more serious cerebral symptoms.

CERVICO-BRACHIAL AND BRACHIAL NEURALGIAS are less often indicative

of the neuropathic taint than the facial neuralgias; and, on the other
hand, they are, like sciatica, relatively often due to neuritis set up by
injury, amputation, strains, enlarged cervical glands, periarthritis of
the shoulder,39 etc., or associated with herpes zoster. When not due
to an unremovable cause the prognosis is favorable. The treatment
needs no special description.
39 See J. J. Putnam, “A Form of Painful Periarthritis of the Shoulder,” Boston Med.
and Surg. Journ., 1882.

INTERCOSTAL NEURALGIA is a very important form, both on account of

its frequency and obstinacy, and because it is often associated both
with anæmia and chlorosis and with affections of the visceral organs,
especially the uterus. The distressing cardiac palpitation of
neurasthenic patients often associates itself with pain in the left side,
and there is an intimate connection between neuralgia of the cardiac
plexus (angina pectoris; see below) and neuralgia of the intercostal
and brachial nerves.

Pain in this region, often due to neuritis, may accompany acute and
chronic thoracic disorders, and may be the precursor of herpes
zoster. Caries of the vertebræ and meningitis should be thought of,
and cancer if the neuralgia is very persistent, even if it is paroxysmal
in character.

TREATMENT.—Besides the general indications for treatment referred

to above, it is worthy of special note that nerve-stretching has been
successfully tried for intercostal neuralgia. In one interesting case
seven nerves were stretched at one operation.40 The reporter
discusses the surgical aspects of the operation, and points out that
the nerves should be sought for, not directly beneath the rib, but
behind and beneath it, and thinks that the failure to bear this fact in
mind might lead to puncturing the pleura.
40 Lesser, Deutsch. Med. Wochenschr., Sto. 20, 1884.

MAMMILLARY NEURALGIA (irritable breast of Astley Cooper), though

often met with in company with intercostal neuralgia, may occur
entirely independently. It is sometimes bilateral, and is apt to be
associated with irregularity of the uterine functions. Cutaneous
hyperæsthesia is often present to a distressing degree, and small
tumors of either temporary or permanent duration may make their
appearance (A. Cooper), which, however, do not affect the
prognosis.

There is no especially effective TREATMENT beyond what has been

spoken of. Surgical interference is not especially to be
recommended, though it has occasionally been useful.

LUMBO-ABDOMINAL NEURALGIA, or neuralgia of that part of the lumbar

plexus which supplies the flank and abdomen and the external
genital region. These neuralgias are apt to accompany those of the
intercostal nerves and share in their significance.

The most important facts with regard to them are that they are
intimately associated, in relation both of cause and of effect, with
affections of the abdominal and the pelvic organs and of the testis.
Neuralgias of the terminal branches of the lumbar plexus, the
obturator and anterior crural nerves, though well recognized, are
comparatively rare.

One of the chief respects in which they are important is in calling

attention to the possible presence of disease of the hip-joint or of
periarthritis of the hip, as well as of tumors or inflammation within the
pelvis.
NEURALGIA OF THE SCIATIC NERVE is one of the most severe and
common forms. While sharing in the common etiology and history of
the other neuralgias, it is peculiarly prone to be due to peripheral
causes, which give rise to thickening of interstitial and investing
connective tissue of the nerve. The distribution of the pain may be
coextensive with the whole distribution of the great and little sciatic
nerve, but far oftener the patient indicates certain regions as the seat
of his severest suffering; and these are especially the sacral region
of one side, the neighborhood of the sciatic notch, the popliteal
space, the calf, and the outer side of the foot and ankle. Not
infrequently the whole course of the sciatic nerve is traced out by the
darts of pain; and in this case it is the nerves which supply the
sheath of the sciatic itself which are supposed to be the seat of the
neuralgic process.

Sciatica is usually unilateral, but exceptionally bilateral, or attacks

the two sides alternately. The tender points most often met with are
at the sacro-iliac synchondrosis, the posterior border of the great
trochanter, just beneath the head of the peroneal bone, below and
behind the external malleolus, but numerous others are likewise
noted by Valleix. Sometimes no tender points can be found.
Sometimes, also, it is one or more of the collateral branches of the
sciatic plexus that are the seat of the neuralgia, and the distribution
of the pain and of the tender points varies accordingly.

It is in sciatica pre-eminently—in part, no doubt, because of the

frequency of neuritis—that disorders of sensibility of the skin are
noticed, as well as muscular paresis or spasm. This anæsthesia has
been studied with great care by Hubert-Valleroux and others, and it
has been shown that it is often confined to limited spots, a
centimeter or so in diameter, within which the loss of sensibility may
be nearly absolute. Nevertheless, their functional origin is proved by
the fact that under faradization they may rapidly disappear.

The duration of an attack of sciatica varies from a week or two to

months or even years, and it shows a marked liability to recur,
especially with changes of weather. First attacks occur pre-
eminently, though not exclusively, in middle life, and oftener in men
than in women, evidently because they are oftener exposed to
mechanical injury and, through their occupations, to sudden changes
of temperature and the like.

The occasional causes are numerous, and include sudden wrenches

and jars, even if not very severe, interpelvic pressure from tumors or
impacted feces, etc. Gout, syphilis, and diabetes may act as
predisposing and even exciting causes, and, it is said, gonorrhœa
likewise. Periarthritic inflammations of the hip-joint and varicose
veins frequently excite pains in the various sciatic nerve-branches
which simulate true sciatica.

As has been indicated, although sciatica may be a pure neuralgia

(see under Pathology), running its course without leading to any
appreciable change in the nerve, yet subacute and chronic neuritis is
very common, either as a primary condition or a complication, and its
presence puts a graver aspect upon the case. The pain of neuritis,
when severe, is relatively constant, remittent instead of intermittent,
dull rather than lancinating, increased by motion and pressure;
whereas the purely neuralgic pains are sometimes relieved by
movement. It is, however, doubtful whether an accurate differential
diagnosis is possible (see above). It is to this neuritis that the
muscular atrophy is due which is often so marked, and it may
likewise give rise to various cutaneous lesions of herpetic character.
The severe pain that accompanies typical herpes zoster of this
region is well known.

The TREATMENT of sciatica must vary with the probable cause of the
disease and its stage of progress. Diathetic taints are to be met if
present, and the greatest measure of physical health secured that
the circumstances possibly admit. It is a good precaution in all cases
to secure free evacuation of the bowels and to guard against
hemorrhoidal congestions.

As against the neuralgia itself, the proper means vary with the
acuteness of the attack and the presence or absence of neuritis. For
the acute stage absolute rest is almost always desirable as a prime