Six words that encapsulate concepts and phenomena everyone should be familiar with

We need to equip ourselves with the right tools to understand the world around us and our activities. This is a necessity for everyone, of course, but particularly for those who are called upon to lead organisations and businesses. Because, on closer inspection, a sound approach to production, like responsible citizenship, depends on an accurate understanding of the facts. ‘Tutto si trasforma. Sei pezzi facili per capire l’economia’ (Everything changes: six easy pieces to understand the economy), co-authored by University of Milan-Bicocca economists Leo Ferraris and Giovanna Iannantuoni, is an excellent read for gaining a better understanding of economic reality.

The book is based on the idea that we talk about the economy all the time and make economic decisions every day without necessarily understanding how it works. The result is a paradox: few disciplines have such a direct impact on our lives, yet few are as prone to oversimplification and false insights as economics.

The ‘six pieces’ chosen by the authors are not a mini-encyclopaedia of economics, but rather three concepts — competition, incentives and liquidity — and three phenomena — unemployment, inflation and growth — whose meanings have changed profoundly over the last fifty years.  Economics and economic theory learn from their mistakes, too.  This leads to another observation: theory does not always precede reality. Sometimes, it is reality that provides a harsh wake-up call and forces theory to transform.

Hence the usefulness of this terminology, which presents concepts that are constantly evolving, not fixed ones. Understanding the economy, then, means more than simply learning the terminology: it means recognising how our choices shape the system and how, in turn, the system shapes our choices.

Tutto si trasforma. Sei pezzi facili per capire l’economia

Leo Ferraris, Giovanna Iannantuoni

Egea, 2026