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Show Federal Reserve Board Increasingly Important To U.S. By EDWARD THORLUND The role of the Federal Reserve Re-serve Board and administration administra-tion forecasts of trends is increasingly in-creasingly important in shaping shap-ing a nation's economy. That's the view of Dr. Otmar Emmin-ger, Emmin-ger, of the West German Bundesbank. Bun-desbank. DR. EMMINGER believes official government forecasts concerning wage gains are of critical importance to future economic trends. And he is given much credit for Germany's Ger-many's remarkable stability over the past 20 years. The inflation rate in West Germany has averaged about three percent for years. Dr. Emminger, commenting on the Reagan Administration's recent forecast of six percent wage increases for the coming year, feels that's too high, and will encourage inflation. HE SAYS that when union leaders read such official forecasts fore-casts they set their sights on added benefits in that percentage percen-tage area, or more. That perpetuates perpe-tuates a vicious circle of inflation infla-tion and rising costs, feeding inflation. Dr. Emminger says German labor leaders accept the government's gov-ernment's economic forecasts because they have been right in the past. They adjust their wage demands to a realistic figure, fi-gure, in accordance with such reports. Government policy in Germany limits inflation and wage increases. IN THIS country, he implies, im-plies, it's crucially important for the Federal Reserve Board to see to it that the money supply is controlled with discipline. disci-pline. If money supply targets are not top priority, and not adhered to, that produces uncertainty un-certainty and inflation. Dr. Emminger's comments, reported by David Francis in the "Christian Science Monitor" Moni-tor" recently, place a heavy burden of responsibility on the shoulders of the Federal Reserve Re-serve Board and its chairman, Paul Volcker. HE BELIEVES strictly controlling con-trolling the money supply is the sure means to keep inflation infla-tion and spiraling costs under control-and that administration administra-tion economic forecasts should be based on what strick control of the money supply should and can accomplish. |