Вот рабочий пример с использованием рекурсивного CTE (также обратите внимание, что арифметика в вашем примере неверна):
-- SO3192010
DECLARE @t AS TABLE (row_num int NOT NULL, Period varchar(6) NOT NULL, Measure float NOT NULL)
INSERT INTO @t VALUES (1, 'Jan 08', 10)
,(2, 'Feb 08', 18)
,(3, 'Mar 08', 7)
,(4, 'Apr 08', 67)
;WITH r AS (
SELECT t.*, Measure AS Decay
FROM @t AS t
WHERE t.row_num = 1
UNION ALL
SELECT t.*, r.Decay * 0.5 + t.Measure AS Decay
FROM r
INNER JOIN @t AS t
ON t.row_num = r.row_num + 1
)
SELECT *
FROM r
ORDER BY row_num