Economic history is a fascinating narrative where real-world events and abstract ideas intertwine in a constant dance of cause and effect. Economic theories provide frameworks for interpreting reality, but it is often concrete "episodes" - deep recessions, unexpected booms, transformative innovations - that test their validity, reveal their limitations, and demand the formulation of new paradigms. This book explores precisely that crucial interplay. Through detailed analysis of key episodes, we will unravel how specific challenges drove some of the most important ideas in economic theory and how, in turn, the new theories influenced the policy responses adopted. By understanding these dynamics, we gain a deeper perspective not only on the economic past, but also on the challenges and opportunities we face today.