72' Generating Economic Cycles 



at 1882, 1890, 1898, 1906, 1914. In other studies ^ refer- 

 ring to the Dakotas, the United States, the United 

 Kingdom, and France, the eight-year cycles were iso- 

 lated and were found to be practically synchronous in 

 these countries. Figure 18 shows the graph descriptive 

 of the eight-year cycles in the yield of wheat, oats, and 

 barley. 



With the existence of an international cycle in the 

 yield of the crops firmly established, an obvious corol- 

 lary suggested that according to the law of demand — 

 in consequence of which the price tends to fall with an 

 increase in the supply of the commodity — there should 

 be a derived eight-year cycle in the prices of farm 

 products. Accordingly, the law of demand for the six 

 representative American crops was ascertained, and the 

 derived cycle of prices of farm products was computed 

 from the established eight-year cycles in the yield of the 

 crops. The results are presented in Figure 19, together 

 with a comparison between the actual index numbers 

 of prices and the forecast indices of prices. 



After ascertaining that the prices of agricultural 

 products do actually vary inversely with the yield in 

 a definite, predictable way, it became possible to sub- 

 ject the theory of the existence of generating cycles 

 of crops to a severe critical test. If the prices of agricul- 

 tural commodities do vary inversely with the yield, and 

 if there is a real cycle of eight years in the yield of the 

 crops, then the record of prices throughout a long inter- 



1 "Crop-Cycles in the United Kingdom and in the United States," 

 Journal of the Royal Statistical Society, May, 1919; "Crop-Cycles in the 

 United Kingdom and in France," ibid., May, 1920; "Forecasting the 

 Crops of the Dakotas," Political Science Quarterly, June, 1920, partic- 

 ularly pp. 228, 229. 



