It is not too often that economist Allan H. Meltzer has a kind word for the Federal Reserve System. But now, when the Carnegie-Mellon University professor says the Fed is doing ''rather well,'' that is high praise.
Dr. Meltzer is a longtime critic of the Fed and its monetary policy. He is of the monetarist school of economics, which believes that the growth in the nation's money supply - currency and checkable deposits - should be held on a steady, moderate path. This, monetarists argue, will result in less inflation and a less severe business cycle.
In recent years, money growth has been following a roller-coaster pattern - fast growth for six months, slow growth for the next six months.
What pleases Dr. Meltzer now is that the Fed has kept money-supply growth, measured by what is called M-1, within its announced target this year of 4 to 8 percent. The Fed, he said in a telephone interview, is meeting its target better on a year-to-year basis than at any time in the eight years since it started announcing money-supply targets.
The Fed managed this despite the impact of the Continental Illinois Bank crisis last spring, he added. The central bank did not permit its large loans to the troubled bank to increase the growth rate of money. Instead, it offset the Continental's increased borrowing from the central bank's so-called ''discount window'' by reducing other sources of ''base money.''
Other monetarist economists also praise the Fed.
''The result so far for 1984 would be hard to criticize,'' said Jerry L. Jordan, an economist at the Anderson Schools of Management, University of New Mexico.
Alan Murray at New York's Citibank gives the Fed ''relatively high overall'' grades - ''compared to the way things have been conducted in the past. They have been quicker to react when developments required it.''
Mr. Meltzer and Mr. Jordan are members of a group of eight monetarist economists who call themselves the Shadow Open Market Committee (after the Fed's monetary policymaking body known as the Open Market Committee). This group met in New York a month ago and issued a statement commending the Fed for its performance.
The two professors today remain basically happy with the Fed's monetary policy, but they share a tinge of anxiety. One reason is that the money supply hasn't grown much since June. If that continues long enough, monetarists believe , it will result in an economic slowdown or recession.
One member of the shadow committee, on leave while serving as Treasury undersecretary for monetary affairs, is Beryl Sprinkel. He told reporters last week: ''We think there is plenty of room for some easing of monetary policy.'' The Fed's Open Market Committee will hold its monthly meeting to consider monetary policy Wednesday. The basic money supply plunged $2.5 billion in the week ended Oct. 25, with three-month growth now only 0.4 percent.
Dr. Meltzer says if money supply growth is stalled through January, ''I would be concerned.'' Another Treasury official agreed: ''It would be certainly troublesome if we had another quarter of no growth.''
One reason Professor Meltzer is not too anxious is that he suspects that forthcoming revisions in the seasonally adjusted money-supply numbers will show a slower growth rate for the early part of the year and a faster one for the months since June. A similar growth pattern and revision occurred in 1983.
The Treasury official, commenting on the possibility of a revision in the statistics, said: ''I don't know whether you would want to bet the farm on that.''
A continuing criticism by the monetarists of the Fed is over the method it uses to manage money growth. The Fed tries to control the amount of borrowing by commercial banks at its discount window, adjusting this amount depending on trends in interest rates and the money supply. The monetarists would prefer that the Fed controlled what is called the ''monetary base'' - cash and bank reserves.
But they do laud the Fed for switching from ''lagged reserve accounting'' to ''contemporaneous reserve accounting'' - a change in measuring the reserves of banks which, the monetarists believe, has probably given the Fed quicker control over money growth rates.
''I'm keeping my fingers crossed that whatever they are doing, they keep on doing it,'' Jordan said.
Another matter of some speculation among monetarists is a suspicion that the lag between changes in money growth rates and its effect on the real economy have shortened. Looking at past history, monetarists figured that on average a slowdown in the growth of the money supply would produce a slower economy in six to nine months.
Dr. Meltzer looked at the turning point in the monetary base growth rates in the three years up to the autumn of 1983 and found that the turning point in gross national product (a slowdown or acceleration in output of goods and services) followed only one quarter later. That pattern seems to have continued since. Indeed, the third-quarter slowdown in GNP follows a slowdown in the growth of the monetary base a few months earlier.
But Dr. Meltzer himself hesitates to predict short-term developments in the economy from short-term changes in monetary numbers. ''I don't believe in quarterly forecasting,'' he says.
For the moment, he says, ''I am not overly disturbed by the slowdown in monetary growth.'' But he and other monetary economists figure that if money growth doesn't pick up soon, the slowdown could become a recession.