August 1, 1997

Analysis: plunge in Thai baht, followed by wave of currency depreciations through South and Southeast Asia, illustrate shortcomings of international early-warning system set up after Mexican peso crisis of 1994-95 to head off currency upheavals in emerging economies; International Monetary Fund officials are angry that Thailand steadfastly resisted pressure to take new steps to curb its current-account deficit, raise productivity, reduce short-term foreign borrowing and strengthen creaky banking industry weighed down by speculative property loans; even after Thailand was forced to devalue baht on July 2, Bangkok waited until July 28 before asking for IMF loan and agreeing to accept whatever economic disciplines are imposed; C Fred Bergsten, who heads Institute for International Economics, says IMF and Group of Seven countries should have pressured Thailand earlier and more strongly to take corrective action; graph (M)

Economy at Slower Pace The economy grew at an annual rate of 2.2 percent from April to June, less than half the preceding quarter, as consumers reduced their spending, the Government said. Page D1. Cohen Defends Decision The Secretary of Defense defended his decision not to promote a general, saying the officer failed to safeguard his troops. Page A20.

America's railroads, which have downsized, consolidated and increased productivity, now look to technology to help them steal customers back from truckers; locomotive manufacturers, freight-car makers and electronics companies are devising technologies that can add speed, reliability, freight-hauling capacity and other improvements that customers are demanding; new cars and locomotives are expensive, up to $2 million each, prompting railroads to lease instead of buy; as result, leasing companies are placing huge orders for new cars; Assn of American Railroads reports that big lines have reduced employment to 188,000 from 458,000 in 1980, and that productivity of remaining workers has tripled; photo; graphs (M)

Commerce Department reports that economy grew at annual rate of 2.2 percent in April-June period, less than half that of preceding quarter; Clinton Administration and private analysts cheer report; 2.2 percent annual growth rate is what most analysts regard as economy's limit before setting off upswing in inflation based on how fast labor force is growing and amount by which workers and machines become more efficient; Commerce Department reports that consumer price index rose at modest 1.9 percent pace in quarter even though energy prices advanced; graph (M)

Article describes several of New York City's most interesting and offbeat video rental stores; photos (L)