THE THEORY OF INTEREST

that enter into the composite P'), and (2) the form ofvariation of the weights. As indicated in reference (6) inthe above footnote, the form of variation of the weightsis exactly—but in reverse order—the form in which thedistributed influence of any P' tapers off during succes-sive periods of time. 12

“A price change P' m pertaining to the month t m exerts an influence,F(t m + X), whose intensity is proportional to 8 during t m +s , to 7 duringt m + 4 , .to 1 during t m + », to 0 during tm + u.

(a) Distribution of Influence of Pi during the TimeSubsequent to the Month Centering at t..

imposing PI

Conversely the aggregate influence on the affected variable duringthe month t m consists of the various P' m _X which enter with the follow-ing weights tapering off in arithmetical progression; P ’ m —3 with weight

8, P'm —4 with weight 7,-- P ' m —10 with weight 1, P' m —u with weight 0.

The numerical measure of this composite influence is:

P'm =-^-18 P'm — a + 7 P'm — 4 + ....+ 1 P'm-io + 0 P'm-ll],

the divisor 36 being the sum of the weights,

36 = 8 + 7+ ....+1+0.

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