118 Economic Cycles: Their Law and Cause 



It will be recalled from that description that the 

 smoothed index for any given year is the mean of three 

 actual indices: the actual index for the given year, the 

 actual index for the year preceding the given year, and 

 the actual index for the year following the given year. 

 The quantities whose correlation is in question are the 

 deviations of the actual indices of general prices, and of 

 yield per acre, from their respective smoothed series. 

 The results of the computation are as follows: 



From 1870-1911, r=.303, 

 From 1870-1890, r = .370, 

 From 1890-1911, r = .250. 



In the first row the correlations were obtained from 

 the continuous series in which the Falkner index was 

 adjusted to the index of the Bureau of Labor. In the 

 second row the correlations were derived from the 

 Falkner index unaltered. In the third row the correla- 

 tions were computed from the index of the Bureau of 

 Labor. We infer that the deviations from their general 

 cyclical movement of thejndices of general prices vary 

 directly with the deviation from their general cyclical 

 movement of the indices of the yield per acre of the 

 crops. 



i 



The second of the two questions as to the cause and 

 law of the cycles of general prices was stated in this 

 form: Are the cycles of prices and the cycles of crops 

 correlated? The preceding paragraphs have presented 

 the results of the inquiry as to the relation between the 

 deviations of actual prices and of yield from their 



