On Nov 7, 2007, at 3:17 PM, Dennis Claxton wrote:
>> Building a house, or adding onto or
>> remodeling an existing one, is residential investment. It's an
>> investment because it lasts for a very long time.
>
>
> So this is the classical "fixed capital"?
Yes. Though in the capitalist mind, capital yields a stream of profits, and a house doesn't. (It can yield a capital gain when you sell it, but not always, and that's only a one-shot thing.) So instead, an owner-occupied house yields a stream of housing services for which the occupant pays the owner (who is the same person as the occupant) an imaginary, or imputed, rent. See line 133 in:
<http://www.bea.gov/national/nipaweb/TableView.asp? SelectedTable=299&FirstYear=2005&LastYear=2006&Freq=Year>.
Doug