Sterling Terrell

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You are here: Home / Potpourri / Economics 101: Stock vs Flow

Economics 101: Stock vs Flow

Economics 101: Stock vs Flow

[This is part of the series: The Complete Guide To Economics 101.]

What is the stock vs flow concept in economics?

Well, the difference between stock and flow has to do with time.

The concept of “stock” is, in a sense,  independent of time.

While the concept of “flow” is bound by time.

See, if you say, “I got $50,000” – that doesn’t mean much – because time has not been added to the mix.

“I got a $50,000 trust fund.” is much different than saying “I got $50,000 per month at my new job.”

Another way I have heard it explained is a lake flowing into a river – the lake is the stock of water, and the river is the flow.

The same is true for writing/blogging.

Your daily post is the flow, while your accumulation of posts is the stock.

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Filed Under: PotpourriTagged With: #Economics101

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