Foreign reserve accumulation may obey an active decision

Foreign reserve accumulation may obey an active decision to hoard money —in purchase stavudine to the problem of high capital mobility-- and subsequently may be assigned to key sectors in each country, such as manufacturing, agriculture, infrastructure, etc. Some notion of planned industrialization directed by the state has been highlighted by development economics and Latin American structuralism (see Gerschenkron 1962; Prebish, 1970; Sen, 1983; Bruck, 1998;Levy Yeyati et al., 2004; Hirschman, 2013). Therefore, the idea of a new bank may soundquite convenient as a means to foster growth and development. Now, we proceed to analyze what a development bank is in the economic literature. Historically, three phases can be distinguished in development banking. In phase I a development bank as an “Investment Bank” was aEuropean phenomenon in the 19th century; Belgium, France, and Germany used development banks (investment banks) to catch up economically with England in the 19th century. During this period, banks invested in railroads, channels, and heavy industries (Diamond, 1957, 1981; Cameron, 1953, 1958, 1961, 1972; Gerschenkron 1962; Patrick, 1972; Tilly, 1972, 1992). Phase II, from the Great Depression-wwii to the early 1980; sawthe development bank as an industrial promoter. Underdeveloped (and some developed) countries created development banks in response to the need for establishing national policies to foster industrialization to promote growth and subsequently development. The Japan Development Bank (jdb), the KfW in Germany, the Industrial Development of Canada, the Korean Development Bank (kdb), the Nafinsa in Mexico, the Corfo in Chile, and the bndes in Brazil were established during this period. Also during this period, heavy industrial activities as well as agriculture, housing, infrastructure, education, etc. were the main targets (Aubey 1961; Curralero 1999; Amsden, 2001; Levy Yeyati et al., 2004; Guth, 2006). Finally, in phase III, a development bank focused on narrower objectives than in previous periods had sectors such as international trade and Small and Medium Enterprises (smes) as its targets. This is the period under neoliberalism when development banks could solve market imperfections in the capital markets (Curralero 1999; Amsden, 2001; Levy Yeyati et al., 2004; Guth, 2006; Lazzirini et al., 2012; Isidro Luna, 2013). The historical differences among the three types of development banks can be addressed in terms of ownership, institutions that led growth (the market or the state), and the activities carried out: (1) Investment Banks were private ownership and profit-oriented, as opposed to the second historical phase in which development banks were government sponsored institutions; (2) phase III\'s development banks were mainly government-sponsored institutions but served only as a complement to the economy, which had to be led by the market; (3) in phases I and III, development banks shared the market-led economy but differed in the ownership and the activities supported (see Table 1). Even though development banks have existed for hundreds of years, it is still difficult to operationally define what a development is (Lazzarini et al., 2012). This difficulty is due to the time and the space in which each development bank operates. In this article, we define development according to the following characteristics (Diamond, 1957, 1981; Maug 1973; Ramirez 1987; Bruck, 1998: Arméndariz 1999; Guth, 2006; Lazzarini et al., 2012): (1) it is a financial intermediary, (2) it must have the goal of promoting development, and (3) it is mostly a government-sponsored institution. Thus, our definition of a development bank resembles that in the second period in the history of development banking: development banks with public financing playing a big role in the economies of their respective countries. With this definition, we proceed to analyze whether or not a development bank may spur growth during the current neoliberal era.