10 
But could there not be very strong effects on the flows? The value 
of urban land has tremendously increased in the course of time, 
and much of that gain has been realised when the land has changed 
hands. No doubt the capital gains have had their effect on 
distribution, on consumption and on investment and these effects 
as such are seen in the national accounts but the way in which 
they have come about is shrouded in obscurity. Is that a 
satisfactory state of affairs? 
The idea that the transactions in land etc can simply be left outX 
meets with objections. The vendour has experienced an increase in 
wealth except—in—so—far—as he consumes the gain from the sale. 
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That clearly brings him interest or profit and thus affects ' Ifoc 
distribution of income. A saving has been created to the extent of 
the capital gain and the quasi-investment which has created it is 
the corresponding spending of the buyer. We may call it a quasi 
investment in the same way as the budget deficit because each 
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creates automatically saving to finance it. They ressemble 
investment from the point of view of creation of effective demand 
even though they do not represent material wealth but only claims 
which command renumeration in the form of interest< This increase 
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in nominal wealth is brought about by spending, in most cases 
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financed by bank credits. 
Unlike the buyer who pays just one lump sum the seller can 
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distinguish how much of the—purchase pr-iee is maintenance of his 
wealth and how much is income. 
But what happens if the capital gains are spent on consumption? 
This is an even more spectacular case of the effects of capital 
gains. Since this consumption has not been created in the normal 
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circuit of income-cost-income,it is an exogenous variable as it 
were ,it acts as a quasi-investment that is it produces by the