Last week, I watched my daughter giggle as she made her way down the water slide at our public pool. She was floating on a mat that was pushed along by a stream of water until she was dropped, amidst laughter and delight, into the deep end of the pool. Ever the geek, I could not help but think of the concepts of “stocks” and “flows” in economics. Stocks are compared to the amount of water in the pool at any one time, while flows are the rate of change of that water, how much water is pumped into the pool minus the amount of water leaving the pool.
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