70 



Generating Economic Cycles 



Economic Cycles 



If index niunbers of the annual yield per acre of 

 American crops are plotted for a considerable period, 

 from 1882 to the present tune, for example, the graph 

 will be a composite of three types of changes — secular, 

 cyclical, and random — which were long ago classified 

 and described by Cournot. In Chapter II, I eliminated 

 the secular changes in the yield per acre of the six 



FiouBE 17. Periodogram of the yield per acre of American crops. 



leading crops in American agriculture, and then formed 

 index numbers of their percentage deviations from the 

 respective secular trends. The series of index numbers 

 was then scrutinized with a view to finding evidence of a 

 real, recurring cycle, and Figure 17 shows that of all 

 possible cycles between three and twelve years in the 

 index numbers of the yield per acre of the crops, the 

 most probable length is in the neighborhood of eight 

 years. If an eight-year cycle is fitted, by the method 

 of least squares, to the index numbers of yield, the 

 maxima of the repeated cycle fall, approxunately, 



