SEMAINE D'ÉTUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIQUE ETC. 
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correct projections, if they affect policy decisions, can sometimes 
have serious consequences. I would like to give two examples, one 
drawn from the U.S. and the other from the U.S.S.R. In the early 
part of the last decade, about 1950, a series of projections about 
future demand/supply in agriculture were made for the U.S. The 
projections implied that the growth of demand over the next decade 
was going to be very rapid and that there seemed to be little pos- 
sibility of rapidly expanding production beyond what had been 
achieved during World War II. It is impossible to say the exact 
connection between that series of projections and what was actually 
done in the policy field; it at least was used as an excuse in the 
discussion for increasing the support prices in the early 1950s; this 
action had very serious economic consequences, later, in inducing 
too many resources to remain in agriculture. Obviously if nobody 
had paid any attention to these projections, they would have done 
no harm, but in this case attention was given to them and we arri- 
ved at the wrong decision. 
In the U.S.S.R. the Seven Year Plan for 1958-65 involved 
projections for agriculture. These projections or plans were made 
with great enthusiasm, but I assume were believed to be realistic. 
A large increase in output was to be achieved by 1065, largely 
through capturing what Soviet officials call « reserves » which didn’t 
require additional resources; thus it wasn’t really necessary to push 
the fertilizer plan or other plans to increase the resources used in 
agriculture. The errors in the projections have had a serious im- 
pact. Had the official projections for the. U.S.S.R. been similar to 
those made by Kahan and me which indicated that output would 
increase by less than 25 percent instead of 70 percent in 7 years, I 
suspect that several very different policy decisions would have been 
made during the past few years. Some of the difficulties that have 
resulted from a reduction of the grain crop by perhaps a quarter 
in 1963 compared to 1962 would not have occurred. The U.S.S.R. 
would not now be using perhaps a billion dollars in foreign exchange 
to purchase grain during the coming year (1963-64); they would 
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