68 Economic Cycles: Their Law and Cause 



the relation between crop and rainfall for constant 

 values of temperature? The problem of the effects of 

 the constituent factors is solved only after the more 

 general problem has received its solution. This method 

 offers promise of an answer to the question as to the 

 relation between the effective demand price and the 

 supply of the commodity. 



The chief difficulties in the computation of statistical 

 laws of demand are due to changes that occur in the 

 market during the period to which the statistics of 

 prices and of quantities of commodities refer. In order 

 that the statistical laws of demand shall have sufficient 

 validity to serve as prediction formulae, the observations 

 must be numerous; and in order to obtain the requisite 

 number of observations, a considerable period must be 

 covered. This usually means that, during the interval 

 surveyed in the statistical series, important changes 

 occur in the condition of the market. But in case 

 of staple commodities, such as the agricultural products 

 with which we shall have to deal, the effects of those 

 changes in the condition of the market that obscure the 

 relation between prices and amounts of commodity may 

 be largely eliminated. As far as the law of demand is 

 concerned, the principal dynamic effects that need to 

 be considered are changes in the volume of the com- 

 modity that arise from the increasing population, and 

 changes in the level of prices which are the combined 

 result of causes specifically responsible for price cycles 

 and of causes that produce a secular trend in prices. 



