28 Generating Economic Cycles 



where x = the index of the yield and y = the index of 

 prices. This close relation indicates that the eight-year 

 cycle in the yield per acre of the crops tends to generate 

 an eight-year cycle in the prices of the products. 

 Figure 8 shows, in its upper half, the course of the index 

 number of actual prices and the course of the theoretical 

 index when 



y = - 1.295X - .02 



is used as a forecasting formula. The lower half of 

 Figure 8 shows the generating eight-year cycle in the 

 yield per acre of the crops and the derived eight-year 

 cycle in the prices of the crops. The equation of the 

 generating cycle of products was obtained in the preced- 

 ing section. The derived cycle of prices was computed 

 from the generating cycle of products by means of the 

 formula connecting the variations of the combined 

 yield with the variations of the combined prices. 



y= - 1.295a; - .02 



Cycles in the Products of Mines 



We have noted that according to the census of 1900, 

 the values of raw materials used in manufactures were 

 as follows: from farms, $1,941,000,000; from forests, 

 $119,000,000; from mines $320,000,000; from the sea, 

 $10,000,000. Of the aggregate value of these materials, 

 81.2 per cent was supplied by the farms; 5.0 per cent 

 by the forests; 13.4 per cent by the mines; and 0.4 per 

 cent by the sea. We have already shown that the yield 

 of the leading fann crops moves in well-defined cycles 

 which generate corresponding cycles of agricultural 



