To find a substitute for laboratory experiment, economists pay close attention to the natural experiments offered by history. When a war in the Middle East interrupts the flow of crude oil,for instance,oil prices skyrocket around the world.For consumers of oil and oil products, such an event depresses living standards .For economic policymakers, it poses a difficult choice about how best to respond.But for economic scientists, it provides an opportunity to study the effects of a key natural resource in the world's economies, and this opportunity persists long after the wartime increase in oil pries is over. Throughout this book, therefore we consider many historical episodes.These episodes are valuable to study because the give us insight into the economy of the past and,more important,because they allow us to illustrate and evaluate economic theories of the present.