Danny Leipziger

Danny LeipzigerDanny Leipziger is Professor of International Business and International Affairs at George Washington University, and is the founding Managing Director of the Growth Dialogue. He is former Vice President of the Poverty Reduction and Economic Management Network (2004–09) at the World Bank. Over the course of his 28-yearcareer at the World Bank, he held management positions in the East Asia Region and the Latin America and Caribbean Region as well as in the World Bank Institute. He was the Bank’s first Head of the Independent Sanctions Board, the originator of the Bank’s Gender Action Plan, and the founder of the Commission on Growth and Development ( 2006-2009) of which was Vice Chair. Prior to joining the Bank, Professor Leipziger held senior positions in the U.S. Agency for International Development and in the U.S. Department of State, including on the Secretary’s Policy Planning Staff. He holds a Ph. D. in economics from Brown University. He has published widely in the area of development economics and development finance. Professor Leipziger has published more than 50 scholarly articles, including on Korea’s industrial policy, Argentina’s currency board, urbanization in Africa, currency crises, and global economic growth. His Lessons of East Asia (U. of Michigan Press, 1997) is still in print. Professor Leipziger’s recent books include Globalization and Growth (with Michael Spence), Stuck in the Middle (with Antonio Estache), and Ascent after Decline: Regrowing Economies after the Great Recession (with Otaviano Canuto).

Papers Published in World Economics:

Combining Growth and Gender Diagnostics for the Benefit of Both

Women’s economic empowerment is not a new issue, but it continues to challenge both governments and development assistance agencies. Progress in closing the gender gap in labor force participation has stalled despite closing the gender gap in education. One reason for this may be that gender advocates and growth devotees are not pursuing both agendas simultaneously when there is a huge space for them to collaborate effectively. Gender-enhanced growth diagnostics offers a ‘win-win’ solution to this problem. It identifies distortions that constrain both economic growth and female labor force participation and can therefore point to efficient welfare-enhancing interventions that close gender gaps. Applied to Turkey, this approach reprioritizes the constraints to economic growth and inclusion.

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Korean Housing Finance, Household Debt, and Economic Growth

Governments around the world are confronted with the problem of stoking demand and re-firing growth. The Korean government has relied on making mortgage credit more readily available to boost the housing market and energize the economy. However, this policy exposes Korean households to additional financial risks given their high levels of indebtedness. Moreover, since typical Korean home mortgages feature short-term maturities, floating-rate interest payments, and final balloon payments of principal, such risks are heightened. The Korean mortgage system requires reform, and efforts are needed to reduce the vulnerability of Korean households in coping with possible external shocks, such as sharp interest rate rises and unexpected house price declines. Since housing accounts for almost three quarters of typical Korean household asset portfolios, the housing market, combined with an expected decline in the Korean population, has a significant implication for long-term growth prospects of the Korean economy and the fortunes of the middle class in Korea. The paper assesses public policy options for reform of the mortgage market in Korea with the aim of reducing vulnerabilities for households and for economy more generally. Governments facing similar policy choices as does Korea must balance policies for short-term growth with the longer-run risks involved.

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The New Economic Powers (NEPs)

In the wake of the global financial and economic crises, much attention has been focused on large developing economies, particularly the BRICs, and their role in the new economic landscape. Focusing on trends in demographics and output, the emergence of the BRICs crystallised the notion that there was a group of up-and-coming economies towards which global attention was shifting. Over time, however, the term has transcended purely economic considerations – it is an acknowledgement that large emerging economies will play a more important role on the world political stage as well. While the BRICs are major protagonists, they are not completely representative of this global shift – the field of potential global players is undoubtedly larger. This paper examines a group of ten countries that will play an important role in global economics and politics, focusing on the current state of their engagement in the international system, and their representation in the global financial architecture. A critical look at the roles and responsibilities of new actors is particularly important in the current environment as the crisis presents emerging powers with an unprecedented opportunity to increase their level of engagement in both economic and political spheres, as well as to play leadership roles in systemically important initiatives.

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How can Korea Raise its Future Potential Growth Rate?

Korea has achieved tremendous economic progress over the last three and a half decades, but in recent years growth has slowed down, and looking forward, most forecasters expect potential growth to decline substantially. The authors’ analysis of the key factors determining potential growth in Korea suggests that only if Korea implements swift reforms to address the low productivity of its service sector and prevent the decline in its labour supply, can the Korean economy achieve a doubling of its per capita income level by 2020. Without a rapid response this goal will be unachievable and the expected growth slowdown will be unavoidable. Reforms intended to boost productivity in services and labour force participation could help Korea sustain growth at double its expected real growth rate in the business-as-usual scenario in the period 2020–40.

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