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Walter Heller, my favorite economist, says as a member of Time's economic panel and also as commentator for the Public Broadcasting Service (''Nightly Business Report''), that better times may be ahead. The smiling man who was top economic adviser both to John Kennedy and Lyndon Johnson says hopefully that we have ''gone through a watershed on inflation'' and ''a reasonable bet is that recovery will be well under way by year's end and will move along at about a 3 1 / 2 percent pace in 1983.''

That's fine. I like Walter Heller, University of Minnesota, partly because he is so often right and partly, I suppose, because I can understand him. He doesn't use the word ''econometrics'' for example. He now believes Fed Chairman Paul Volcker has shifted from ''merciless to merciful monetarism'' and that President Reagan has shifted from ''supply side to sensible tax policies.''

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And what does that signify? Well, in Dr. Heller's straightforward prose it means tht the Federal Reserve, faced with a floundering economy and a floundering financial system, ''simply had to ease up on the monetary brakes.'' And the White House and Congress, faced with mountainous deficits ''simply had to ease up on the fiscal accelerator.'' Well, maybe. But even Dr. Heller throws open an escape hatch. It's a long way, yet he agrees from ''a solid economic recovery.''

It has been good news on Wall Street in recent months, though of course it can change any day. By one estimate the rise in stocks and bonds has added $150 billion in paper values. Fine! ''A booming market does lend some strength to the prospects of recovery.'' Why? Because higher stock prices enable companies to raise equity money more cheaply, and people are tempted to buy things if they are hopeful. That helps, in a situation where almost a third of our manufacturing capacity is idle.

What are the recovery odds? Treasury Secretary Donald Regan is optimistic just before the midterm election. He promises a vigorous revival though he has backed away from his earliest forecast of a ''roaring'' recovery. Dr. Heller has found other adjectives, however, from less ardent voices whose views flow across his desk. He has jotted down some of the ambiguities: ''modest, mild, moderate, and muted; feeble, fragile, and anemic; subdued, sluggish, subpar, and disappointing; lackluster, limp, lukewarm, and lopsided; weak, wobbly, hesitant, and halting;'' yes, and to fill out the list - ''gradual, restrained, reluctant, retarded, and rickety.''

With a pail full of watery adjectives like that even the most hopeful comments would be diluted, or perhaps extinguished. The group of high-power observers that Time periodically assembles as its ''Board of Economists'' (and that includes Dr. Heller) eschews most of these qualifiers but manages to convey the same doubts. Time summarizes the feeling in its headline - ''A Weak Recovery (Maybe).'' Incidentally the group thinks that it's time for the Federal Reserve Board to relax a bit and allow the money supply to begin modestly ''overshooting'' the annual growth target of 5.5 percent. One cause of anxiety for everybody is the world banking situation.

There's some danger here that the international monetary institutions will not be able to control the crisis that affects Mexico, Brazil, Argentina, Poland , and other hard-pressed nations. The financial crisis could turn into collapse. But can the industrial world afford to let that happen? Won't the lending authorities, including the Federal Reserve Board, have to provide more liquidity and ease interest rates? That could provide a fringe benefit at home too, by making interest rates lower in the United States. Rightly or wrongly Dr. Heller favors that.

Canada's recession is worse than that in the United States. The record of Britain, France, West Germany, and other members of the Organization for Economic Cooperation and Development is dismal. Unemployment in Britain has been over 13 percent. Dr. Heller says that many Americans will be surprised that the record in the US for generating jobs and new investments has surpassed Europe's in the past 10 years.

So what's the situation today? President Reagan's affair with ''supply-side economics'' (hoping to balance the budget by cutting taxes and federal expenditures while increasing arms costs) seems put aside. There are huge quantities of idle labor and factory capacity to be drawn upon. European countries are looking to the United States. Dr. Heller says, ''We are in a better position to promote economic expansion without reigniting inflation than any of the other industrial countries.'' Well, maybe. But I confess that my own personal feelings about recovery right now are ''modest, mild, moderate, and muted.''

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