THE QUESTION for economic policy, in the past week, was whether to raise interest rates again. For the first time in memory, it was the administration's economists who wanted to take them up, and the Federal Reserve Board that wanted to leave them where they are. Usually, it's the other way around, with the Fed hot to fight inflation with tight money and the White House anxious about the effect on jobs. This peculiar incident illuminates the very limited range of choices available to the people making policy, and the bleak prospect they face.

It was, in a sense, a collision between the political economists and the technical economists. The political economists in and around the White House argued, accurately, that federal policy has to respond to the current acceleration of inflation. If government just sits there with its hands in its pockets, people will assume that it is willing to tolerate faster inflation-and they will then try to protect themselves in ways that make the inflation run faster than ever. The government has a duty to react, they said, and the only thing that it can do quickly is to raise interest rates another notch.

But the technicians, strongest at the Fed, replied, also accurately, that there is a lag between any economic decision and its impact. To raise rates now would tighten the brakes on the economy around the end of the year, when the country will probably already be sliding into a recession.

The issue has now been settled, at least temporarily and tentatively. Rates will stay where they are.The reason it the vast increase in oil prices that is now taking place around the world. American policy had earlier assumed that, whatever happened here, expansion would continue in Europe and Japan. That would provide strong markets for American exports, pulling this country smoothly and rapidly out of the dip-in time, to put it crudely, for the presidential election.

But the shock of the high oil prices makes it quite possible that all of the industrial nations will shortly tip into recession together. That happened after the oil price increases of 1973-74, and it was why the recession was unusually severe. The recollection is making the administration ever more cautious about adding any additional restraint at the present delicate moment.

The debate over raising the interest rates is, in effect, a veiled debate over strategies to deal with the next recession. It has arrived at the somber conclusion that at present it's best to do nothing, on grounds that doing anything would probably make things worse.