NEW YORK (AP) _ Only the naive would believe that inflation is dead, but even the experts are now wondering where it went.

It is in hiding. But where?

Over the past year it has effectively disappeared from the American economic scene, to the surprise of even the Federal Reserve, which generally can search it out when no one else can.

It isn't easily visible abroad either. Among G-7 countries, or large trading nations, it has averaged a mere 2 percent a year for the past four years, less than half the 1990 rate.

Using the old rules of thumb _ such as, a jobless rate below 5 percent is sure to bring on price increases _ reputable analysts have damaged their reputations. Unemployment did drop below 5 percent earlier this year, but the already-low inflation rate dropped too.

``Something is happening here beyond the scope of conventional business-cycle analysis,'' say economists at Wright Investors' Service, an international money manager and investment adviser.

Where once upon a time you could find inflation's hiding place with only a cursory study of the American economy, you now have to search the whole world. The whole trading world, that is.

The search turns up more explanations for the flight of inflation than inflation itself. Among these explanations:

_ In a global economy, the production or assembly of goods flows to the area of least cost. Simple electronic products to the Far East, for example.

_ The swift development of Third-World and former socialist economies has greatly expanded capacity and added competition in labor and product markets.

_ The growing use of computer technology makes for efficiency in production and distribution. It has spread beyond Europe and Japan and other developed countries to the Third World.

_ Corporate restructuring also has spread throughout the world. Companies must become efficient or be overwhelmed by competitors. The threat is imminent: Lower your costs or be left behind.

_ Centrally controlled economies are collapsing of their own noncompetitive obesity and density, replaced by more efficient, market-directed enterprises.

_ In all, countries everywhere are getting a better grip on their budgets _ even in the United States.

Somewhere inflation is lying in wait, ready to pounce on an opportunity. But, hunted and without opportunities, it is for the time being in hiding and biding its time.

Its opportunity will come, eventually, and that time might be when the world becomes complacent and ceases to fear it. That time might be far off _ but who really knows?

Already, it is noted, the price of gold, the historical hedge against inflation, is near a 12-year low. The Federal Reserve, the nation's inflation watchdog, is said to be at ease for the moment.

Could complacency begin this way? Would it be more comforting if the Fed were back to its old habit of issuing irritating warnings _ just to show the watchdog is awake and alert?

End Adv PMs Tuesday, July 22