President Carter yesterday named Paul A. Volcker, a widely respected iternational monetary expert who has taken a firm stance on fighting inflation, to replace G. William Miller as chairman of the Federal Reserve Board.

The decision to appoint Volcker, now president of the New York Federal Reserve Bank, represented an acceptable to the financial community and who could help stem the decline of the dollar.

The White House had cited filling the Fed vacancy as a top priority in the wake of last week's Cabinet reshuffling. The void at the Fed, caused by Miller's shift to replace ousted Treasury Secretary W. Michael Blumenthal, had sent the dollar down.

Carter also named Hedley Donovan, retired editor-in-chief of Time Inc., as a new senior adviser on both foreign an domestic policy -- the president's first key White House staff change since last week's shakeup.

Press secretary Jody Powell said Donovan would report directly to Carter and would be the only person on the White House staff other than National Security Affairs Adviser Zbigniew Brzezinski who will not go through staff chief Hamilton Jordan.

However, Donovan's full responsibilities were not immediately clear. Powell said only that Donovan would deal with "whatever issues the president chooses to solicit his advice on and whatever issues he chooses."

The appointment of Vocker to the Fed job was hailed almost unanimously on Wall Street and in financial centers abroad. Immediately after the announcement, the dollar rebounded moderately and the stock market rallied.

The nomination had been viewed as crucial because the Fed chief wields so much influence over money and credit policies, which have substantial impact on the course of the economy. The shakeups last week had created new uncertainties.

In a comment typical of that heard from many quarters, Henry Kaufman, partner in salomon Brothers, the New York bond house, said the appointment "end the specuation on whether the White House is going to politicize monetary policy."

Miller also issued a statement praising the nomination as "an excellent choice." He said the appointment "guarantees continuity in the conduct of the nation's monetary policy . . . that is required if we are to assume a sound dollar. . ."

The White House announcement of the Volcker nomination was accomplished by a statement from Carter saying Volcker "shares my determination to vigorously pursue the battle against inflation at home and to ensure the strength and stability of the dollar abroad."

In a press conference in New York later, however, Volcker reasserted his view that the Fed would remain independent of the White House, and called for "a steady disciplined policy" to combat inflation.

He also minimized recent votes in the Fed's policymaking Open Market Committee in which he sided with a minority that sought to boost interest rates further last March and April to slow down the economy.

Volcker insisted yesterday the votes were merely "a difference in judgment" and "not a deep cleavage." However, he also declined to back away from those views, saying he "would not say that policy in the past should not have been firmer."

Donovan, who retired on June 1 as editor-in-chief of Time Inc., joined the publishing firm as a writer in 1945 and was close to the magazine's co-founder, Henry R. Luce. He took a major interest in Fortune magazine.

It was largely through Donovan's influence that Time reversed its intitial support for the Vietnam war in the late 1960s -- an outgrowth of Luce's hard-line China stance -- and later called for the resignation of President Nixon.

Powell said yesterday Donovan had met the president briefly when Carter was governor of Georgia, having spent two or three days traveling around the state with him. Donovan's White House salary still is undecided.

Now 65, Donovan is a native of Minnesota. A 1934 graduate of the University of Minnesota, he received a second bachelor's degree at Oxford University, where he was a Rhodes Scholar.

Powell declined to say whether Carter plans to make other changes in the White House staff. He said the president asked Donovan to join his staff because he wanted "someone of that experience and stature here in the White House."

A Democrat who served as under secretary of the treasury for monetary affairs during the Nixon administration, Volcker, 51, is regarded as skilled and highly competent by liberals and conservatives.

A pragmatist without strong ideological preferences, Volcker was principal architect of the major overhaul of the international monetary system that the United States engineered between 1971 ans 1974.

His term as president of the New York Federal Reserve Bank, which serves as the operating arm of the entire Federal Reserve system, made him the Fed's second most-influential official. He also has been vice chairman of the Open Market Committee.

The search for the new Fed chairman was conducted primarily by Vice President Mondale's office. By late Monday, the choice had narrowed to Volcker and Bruce K. MacLaury, an economist who is president of the Brookings Institution.

Volcker met Carter for the first time Tuesday, when the two conferred for an hour in the Oval Office before the president made his final decision. Sources said Carter appeared to be "very comfortable" with the choice.

Those familiar with the administration's selection process noted yesterday that in view of the recent turmoil in the markets, the White House was almost forced to name a conservative as Fed chief. as

Carter had considered Volcker for the job in late 1977, when he was faced with replacing then-chairman Arthur F. Burns, but chose Miller instead.

A serious-minded, balding cigar-smoking man who, at 6 feet 7 inches, towers over most of those around him, Volcker will have to take a pay cut to move "up" from his current job to the chairman's post.

Because of quirks in the federal salary structure, the presidency of the New York Federal Reserve Bank pays $110,000 a year, while the Fed chairmanship pay $57,500.

Volcker will be sworn in for a four-year term as Fed chairman and a 12 1/2-year term as a member of the Fed's board of governors. The Senate Banking Committee announced yesterday it will consider his nomination on Monday.

Volcker, a 1949 economics graduate from Princeton University, received a master of political economics degree at Harvard University and studied at the London School of Economics.

Before joining the Nixon administration in 1969, he was vice president of Chase Manhattan Bank, in charge of planning and was deputy under secretary of the treasury for monetary affairs during the Kennedy and Johnson administrations. CAPTION: Picture 1, Carter, returning the presidential press conference to prime television time in the ornate East Room of the White House, fields a question from a reporter. By John McDonnell -- The Washington Post; Picture 2, PAUL A. VOLCKER . . dollar rebounds after appointment Picture 3, HEDLEY DONOVAN . . . to report directly to Carter