Difference between stock and flow

Stock and flow are both variables in nature and the distinction between them should be studied carefully to understand the development of the economic variables.

Generally, most of the economic variables that are studied are categorised either as stock or flow variable. Stock refers to any quantity that is measured at a particular point in time, while flow is referred to as the quantity that can be measured over a period of time.

Both the stock and flow are interdependent on each other. The concept of stock and flow is very essential in Economics, as it helps to understand the development of economic variables.

Let us study some of the differences between stock and flow in the following lines.

Stock
Flow
Definition
Stock is defined as a variable that is measured at a particular point in time Flow is defined as a variable which is measurable over a period of time
Time Dimension
Stock does not have a time dimension attached with it Flow has a time dimension attached with it
Nature
Stock is static in nature Flow is dynamic in nature
Influence
Stock influences the flow, as such greater amount of capital will lead to greater flow of services Flow influences the stock, as in increased flow of money supply in an economy results in increase in the quantity of money
Examples
Bank deposits, capital, wealth, population Capital formation, income, interest on capital, depreciation

Also read: Closing Stock Formula

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