Chapter 2. Stocks and Flows

This chapter explains stocks and flows, the key building blocks of system dynamics models. Let's begin with Figure 2.1 which shows a simple model to keep track of the growth in a bank balance due to interest accumulation. This diagram shows examples of three types of variables:
 
Figure 2.1. Example of a flow diagram.


stock the bank balance
flow the interest added
converter the interest rate.

Figure 2.1 shows a double line to represent material flow--in this case, the flow of money from a cloud into the stock. The cloud represents the source of the money. A cloud may also be viewed as a stock that is outside the system boundary, so we don't bother to keep track of it.