Stocks and Flows

Nonrenewable resources are stock-limited. The entire stock is available at once, and can be extracted at any rate (limited mainly by extraction capital). But since the stock is not renewed, the faster the extraction rate, the shorter the lifetime of the resource. Renewable resources are flowlimited. They can support extraction or harvest indefinite

Another common mistake is to confuse energy with power, and this is done even more frequently. It betrays an ignorance of basic physics, and one that, regrettably, is not limited to lay usage. Energy is a scalar, which in physics is a quantity described only by its magnitude; volume, mass, density, time, and speed are other ubiquitous scalars. Powe

our quantitative

understanding of elasticity is shortterm we can estimate what a price reduction will do this week in this quarter but we cannot estimate the effect that consistently lowering prices

• Economy: We know that the amount of money relative to output (total goods and services) is reflected in inflation. This is ALWAYS a relative relationship. There are no true price controls in any system, only a transfer of risk reflected in capital flows.

• Financial markets: We know that in modern financial markets with central banks and fractiona

Stocks allow inflows and outflows to be decoupled and to be independent and temporarily out of balance with each other.