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beginning of 1970. At the same time imports passed through an entir'? administratively conditioned cycle. In that way the situation which the Institute forecast for the second half of 1969 appeared only in the middle of 1970 (see graph 2).

4.    The Institute’s estimate that liquidity would improve in the first half-year and worsen in the second half-year was also shown to be in-correct. A great inerease of indebtedness occurred already in the first half-year. That is a new phenomenon. Until now indebtedness accel-erated only in the recession. Its sharp inerease already in the period of economic upswing represents an ominous indication probably of massive administrative interventions - when once the recession beg-ins - or inflation. (In the meantime the latter has occurred, and the former is being prepared.) Mutual indebtedness of the economv was two times greater than the total amount of short-term credits. That is a unique phenomenon in the world economy and represents a unique regression from commodity-money to natural economic activitv.

5.    Inventories of finał products were indeed reduced in the first half-year, as the Institute forecast, and then a tendency to inerease appeared.

6.    Prices were not stable and began to rise already in the first half-year. From then on their rise continually accelerated.

With respect to 1970 in the new Resolution of the Federal Parlia-mćnt it is stated:¹⁹ »A complicated task of consolidation and stabiliza-tion of economic flows along with further rapid growth, although somewhat slower than in 1969, lies before economic policy for 1970. In order to ensure the realization of the thus determined goals of dev-elopment of the economy, economic policy for 1970 will be directed toward attaining optimal growth of the economy; carrying out stab-ilization policy along with reduction of the balance of payments de-ficit, normalization of the disturbed business relations in the economv and ensuring of adequate relations in distribution of national income, and especially toward strengthening the reproductive capability of the economy«. The Institute did not prepare an elaborate forecast for 1970, for there was no one interested who would finance it. The prev-iously cited Memorandum was prepared by voluntary work for three weeks of several collaborators.

Comparison of forecasts and actuality shows that not one of the expectations of the Resolution was realized. Instead of stabilization we have inflation, instead of optimal growth we have negative growth in agriculture and a significantly reduced ratę of industrial growth. The balance of payments deficit inereased enormously - approximat-ely two times in relation to internal expectation²⁰ - and relations in the economy are extremely disturbed. Comparison of rates of indus-tral expansion shows that the cyclical mechanism of the economy is still unknown to the State apparatus, and therefore in the upturn (1969) it forecast too Iow, and in the cyclical downturn (197 )

too high rates.

*• Jugoslcruenski pregled, 12 (1969), 490.    .. ., _n .„ ,_q7n

*• About 200 instead of 100 million dollars (Ekonomskn politika, Oct. 1-. 19/0.

p. 7).

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