Determinants of short-term debt : a note

Abstract

Although various measures to lengthen the maturity of foreign debt are being discussed, there is relatively little evidence on the determinants of short-term debt. This paper briefly reviews the theoretical literature and discusses a stylized model which stresses the role of short-term debt under conditions of uncertainty. We then complement earlier empirical work by Rodrik and Velasco. Using a new dataset, we find that the determinants of short-term bank lending do not differ significantly between developed and developing countries. The level of economic development and the share of loans to banks are found to have a positive, OECD membership to have a negative impact on the share of short-term loans.