Calculus Interpretation
If the quantity of some stock variable at time is, then the derivative is the flow of changes in the stock. Likewise, the stock at some time t is the integral of the flow from some time when the time was zero until time t.
For example, if the capital stock is increased gradually over time by a flow of gross investment and decreased gradually over time by a flow of depreciation, then the instantaneous rate of change in the capital stock is given by
where the notation refers to the flow of net investment, which is the difference between gross investment and depreciation.
Read more about this topic: Stock And Flow
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