Stock And Flow
Economics, business, accounting, and related fields often distinguish between quantities that are stocks and those that are flows. These differ in their units of measurement. A stock variable is measured at one specific time, and represents a quantity existing at that point in time (say, December 31, 2004), which may have accumulated in the past. A flow variable is measured over an interval of time. Therefore a flow would be measured per unit of time (say a year). Flow is roughly analogous to rate or speed in this sense.
For example, U.S. nominal gross domestic product refers to a total number of dollars spent over a time period, such as a year. Therefore it is a flow variable, and has units of dollars/year. In contrast, the U.S. nominal capital stock is the total value, in dollars, of equipment, buildings, inventories, and other real assets in the U.S. economy, and has units of dollars. The diagram provides an intuitive illustration of how the stock of capital currently available is increased by the flow of new investment and depleted by the flow of depreciation.
Read more about Stock And Flow: Stocks and Flows in Accounting, Comparing Stocks and Flows, More General Uses, Calculus Interpretation, Example of Dynamic Stock and Flow Diagram, History
Famous quotes containing the words stock and/or flow:
“A man acquainted with history may, in some respect, be said to have lived from the beginning of the world, and to have been making continual additions to his stock of knowledge in every century.”
—David Hume (1711–1776)
“For as the interposition of a rivulet, however small, will occasion the line of the phalanx to fluctuate, so any trifling disagreement will be the cause of seditions; but they will not so soon flow from anything else as from the disagreement between virtue and vice, and next to that between poverty and riches.”
—Aristotle (384–322 B.C.)