The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
The search for ways to ensure growth while accommodating necessary expenditure cuts to correct fiscal imbalances, has often led to the advocacy of the government own savings (GOS) measure as an indicator of growth potential in fiscal adjustment. This paper critically examines the rationale of this approach and its implicit assumption of the primacy of capital expenditure for the growth process. In light of the problems revealed in the GOS approach, the paper explores the possibility of alternative weighted expenditure indicators and illustrates the proposed technique, employing data from Thailand.