Prosperity and Depression.pdf

AM/ysis of Theori,sPart Ipartially or totally offset by the effects of other causes, whethercauses outside the economic system (wars, revolutions, inventions,currency depreciations and so forth) or causes inherent in theeconomic system. On the other hand, these factors may alsooperate to reinforce the harvest variations. W. S. ]BVONSsuggested on one occasion 1 that cc if, then, the English moneymarket is naturally fitted to swing or roll in periods often or elevenyears, comparatively slight variations in the goodness of harvestrepeated at like intervals would suffice to produce those alternationsof depression, activity, excitement, and collapse whichundoubtedly occur in marked. succession ".Professor H. S. jEVONS believes that the industrial system andthe emotional outlook of the business community take longer torevolve than the period of a complete harvest cycle, and that theimpulses liberated in two or more harvest cycles accumulateaccordingly until a major business cycle is generated.One consideration which tells against those theories is theabsence of agreement as to the exact period of crop variations.W. S. ]EVONS based his argument on a crop-cycle often and a-halfyears, Professor H. S. ]EVONS on a period of three and a-half years,and Professor H. L. M09RE on an eight-year period. It is,however, conceivable that the same agricultural series may containfluctuations, or, tendencies to fluctuate at intervals of differentlengths (i.e., shorter cycles superimposed on longer ones) as also,for that matter, that general business should exhibit a similartendency. Moreover,·different branches of agricultural outputshow fluctuations of difterent periods. The crop-fluctuationswhich had the greatest effect on general business in the eighteenthand early nineteenth centuries may not be same as those whichhave bad the greatest effect in succeeding epochs. The attemptto find an explanation of the changing periods of business cycleson lines consistent with their agricultural origin is not thereforehopeless.I In a paper read to the British Association in 1875 on c& The SolarPeriod and the Price of Com " (in Investigations in Ctwren&Y awl Finance,page 185).