In the preface to this volume Mr Loveday explains that it is to be regarded as the first instalment of the second stage of the investigation of the League of Nations' inquiry into the Business Cycle, of which Prof, von Haberler's Prosperity and Depression was the first stage. The ultimate object is to apply statistical tests to the alternative theories of the Business Cycle catalogued by Prof, von Haberler. But this instalment is limited to an explanation of the statistical method which it is proposed to employ, followed by three examples. In the first chapter Prof. Tinbergen deals with some of the logical issues involved; in the second chapter he explains in general terms the method of multiple correlation analysis; and in the next three chapters he applies this method to three selected examples – namely, Fluctuations in Investment, Residential Building, and Investment in Railway Rolling-stock.

The second chapter, which gives in brief compass a most lucid account of the statistical method to be employed, is very good indeed. But the first chapter, which should deal with the difficult logical problems involved in applying to economic data methods which have been worked out in connection with material of a very different character, is grieviously disappointing. So far as it goes, it is helpful; but it occupies only four pages, and it leaves unanswered many questions which the economist is bound to ask before he can feel comfortable as to the conditions which the economic material has to satisfy, if the proposed method is to be properly applicable.