Glossary entry

English term or phrase:

flow score

English answer:

A flow variable is measured over an interval of time.

Added to glossary by acetran
Jan 10, 2016 19:19
8 yrs ago
English term

flow score

English Bus/Financial Economics Macroeconomics
The following sentence explains the two parameters used in a graph to illustrate the positions of European countries within the Eurozone.
x = stock score (or stock dimension, as used below)
y = flow score (or flow dimension)

However, despite the following explanation, I'm not sure what is meant by "stock score" and "flow score"

The stock dimension is based on the debt-to-GDP ratio, the net international investment position (i.e. net
foreign financial position of all residents in a country) and excess unemployment. The flow dimension is
based on the government deficit, the current account balance and nominal GDP growth.

Many thanks for your help!
Laura
Change log

Jan 15, 2016 08:47: acetran Created KOG entry

Responses

+2
24 mins
Selected

A flow variable is measured over an interval of time.

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.

https://en.wikipedia.org/wiki/Stock_and_flow

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Note added at 25 mins (2016-01-10 19:44:20 GMT)
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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.

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Note added at 28 mins (2016-01-10 19:47:45 GMT)
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http://www.economicsdiscussion.net/difference-between/differ...

http://hspm.sph.sc.edu/courses/econ/classes/Stocksandflows/S...



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Note added at 29 mins (2016-01-10 19:48:40 GMT)
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Goods and services flow around any economy. "Flow" means that goods and services move from one person to another. In a hunter-gatherer economy, the flow may be done according to custom. In a market economy, the flow may be determined by the buy-sell deals people make. In any society, people are always doing things for each other and giving things to each other. This is the flow of goods and services.

Stocks are also important to economic activity. Stocks do not flow. Rather, they build up or get depleted.
Capital is a stock, not a flow.

Capital = things people make to help them make other things.
Capital
builds up ("accumulates") or
depletes ("depreciates").
Peer comment(s):

agree Mikhail Korolev
10 hrs
agree Tushar Deep
13 hrs
Something went wrong...
4 KudoZ points awarded for this answer. Comment: "Many thanks again! :-)"

Reference comments

13 mins
Reference:

Difference between flow variables and stock variables

http://www.economicsdiscussion.net/difference-between/differ...



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Note added at 15 mins (2016-01-10 19:34:33 GMT)
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https://en.wikipedia.org/wiki/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.
Peer comments on this reference comment:

agree acetran
11 mins
Thank you, acetran
agree Mikhail Korolev
10 hrs
Thank you very much
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