- Stocks contain the memory of the history of changing flows within the system. They contain quantities and information accumulated over time.
- Flows change the quantities involve in a stock. They may either add or remove a stock.
- Flow is fundamental to the dynamics of the system
- The behavior of a system can be understood by understanding the dynamics of its stocks and flows
- A weighted Directed Graph can be used to model the system’s stocks and flows.
General Principles
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As long as the sum of all inflows exceeds the sum of all outflows, the level of the stock will rise.
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As long as the sum of all outflow exceeds the sum of all inflows, the level of the stock will fall.
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If the sum of all outflows equals the sum of all inflows, the stock level will not change. It will be held in dynamic equilibrium wherein the stock does not change but resources still flow through the system.
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A stock can be increased by decreasing the outflow rate as well as by increasing the inflow rate.
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A stock can be decreased by increasing the outflow rate as well as by decreasing the inflow rate.
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A stock generally changes slowly even when the flows into or out of them change suddenly. Therefore, stocks act as delays or buffers in the system. They can only respond to change by gradual filling or draining.
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Changes in stocks set the pace of the system dynamics. The time delay they are associated with may cause delays but also stability. Stocks allow inflows and outflows to be decoupled and to be independent and temporarily out of balance with each other
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We tend to be biased towards examining inflows rather than outflows.
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We also tend to underestimate the time it would take for a stock to increase.
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Nonrenewable resources are stock-limited. The entire stock is available at once and can be extracted at any rate (potentially limited however). But since the stock is not renewed, faster extraction rate means shorter lifetime of the resource.
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Renewable resources are flow-limited. They can support harvest indefinitely but only at a finite flow rate equal to their regeneration rate. If they are extracted faster than they regenerate, they may eventually be driven below a critical threshold and become, for all practical purposes, non-renewable. There are three possible behaviors
- When balancing systems are fast enough to stop extraction before a critical threshold is reached, we overshoot extraction but adjust to a sustainable equilibrium
- When balancing systems are slower and less effective, we overshoot beyond the equilibrium followed by an oscillation around it
- When balancing systems are very weak and extraction only keeps growing, we overshoot and then we have a collapse of the resource.