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The Institute precisely forecast the turning point of the cycle in the second half of 1969, the halving of the industrial ratę of growth and the rise of retail prices over 10°/o, which creates a typical inflationary situation. The Institute underestimated the rise of total unemployment (in the country and abroad) and did not forecast well the change in its structure. It is characeristic that the Parliament still does not concern itself with forecasting unemployment!

After this short analysis of the degree of success in forecasting, we can conclude the following:

1.    Surprisingly accurate forecasting of economic movements in possible.

2.    There exists in the country the accumulated knowledge, person-nel and elaborated methods of analysis which enable a handful of scholars in the course of a few days to give significantly morę precise forecasts than the staffs of officials in State organs. (This assumes that state officials write down in State documents what they in fact know.)

3.    The need is accordingly obvious to carry over the existing knowledge to the state administration (or to make it usable for our society), as well as to ensure permanent financing for further improvements in this field.

The question is posed: why is that not already done? Or morę precisely: why is there resistance to so doing?

5. ANALYSIS OF CURRENT TRENDS AND PERSPECTIVES

Table 1 shows a elear tendency of rapid showing down of the dev-elopment of industry and agriculture as well as the economy as a whole; slowing down of exports and imports and acceleration of price rises. We mentioned above that Yugoslavia is today in first place in Europę according to unemployment, and now we can add that is in second place (behind Czechoslovakia) according to instability. Stagna-tion along with inflation and fluctuations of production bring the Yu-goslav economy close to the type of the Latin American economy and represents its possible alternative. I have discussed in detail elsewhere the phenomenon of slowing down of development,²¹ and it appears to me, have shown that there is nothing common with self-management, but that it is rather a question of the consequences of amateurism and ignorance of economic policy makers, that the inherent potentials of growth are significantly greater and that they can be utilized by the aid of a relatively simple, but scientifically founded economic policy. A design of such an economic policy is given in the second part of this work. Before that it will be useful to show by a short analysis how the observed long-run tendencies emerge in the short-run in the framework of a year.

After the second half of 1969 when there occurred a downturn of the business cycle, the falling movements were halted at the begin-

*' B. Horvat, Ekonomika nauka i narodna prwreda (Zagreb: Naprijed, 1968); Privredni ciklusi u Jugoslaoiji (Beograd: IEN, 1969); Privredni sistem i ekonomika politika Jugoslaoijc (Beograd: IEN, 1970).

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