Stocks and flows in economics

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In economics, the distinction is made between stocks and flows (or stock variables and flow variables). It is akin to the distinction from everyday life: at any one time, a sink is filled with a stock of water, while there are flows of water into the sink (from the faucet) and out of the sink (down the drain).

A stock variable is measured at one specific time. For example, on July 9, 2004, the size of the stock of M1 money supply in the United States was a specific number of trillions of U.S. dollars.

A flow variable is measured over an interval of time. For example, U.S. nominal gross domestic product refers to a total number of dollars spent during a specific time period, such as a year.

Stocks include the total amount of equity holdings, the total amount of capital goods existing, the total value of real estate, etc., all existing at a specific time. Flows include the total amount of consumer spending, the total amount of equities sold per day, interest payments on loans outstanding, etc., all happening over time.