24 Generating Economic Cycles 



Generating Cycles of Products 



We have just established an inverse relation between 

 the yield per acre of each of the six representative 

 crops and their respective prices. If now we can show 

 that the combined yield of the crops is periodic, there 

 will be excellent reason for believing that their combined 

 prices will be periodic and that the prices of commodi- 

 ties produced from farm materials will tend to show 

 the same well-defined rhythm. Our immediate prob- 

 lem, therefore, is to discover whether there is a periodic 

 cycle in the combined yield of the six representative 

 crops. 



To go forward with the work w^e needed to compute 

 an index munber of the combined yield of the represen- 

 tative crops. In treating the preceding question as to 

 the correlation of the yield of the several crops with 

 their respective prices, we computed, in each case, the 

 percentage deviations of the yield per acre from the 

 secular trend. For our present purpose of finding 

 whether the combined yield of the six crops tends to 

 run in cycles, the percentage deviations of the yield 

 of the several crops for each year of the record, from 

 1882 to 1918, were added. The resulting figures, which 

 are given in Table II of the Appendix, constitute our 

 index numbers of the yield per acre of the six crops. 



In the attempt to learn whether, during the interval 

 under investigation, the yield of the crops was cyclical 

 and periodic, the periodogram of the yield was com- 

 puted and the graph was drawn. The results of the 

 computation are given in Table III of the Appendix, 

 and the graph appears at the top of Figure 7. The 



