Using data from publicly traded Turkish corporations for the period 1988-94, this paper finds evidence that a high rate of inflation reduces the maturity structure of corporate debt contracts. This effect is particularly interesting in this case because in contrast to what is usual, the rate of inflation was remarkably stable even when running high. This hints that inflation uncertainty is not the primary force driving the shortening of corporate debt contracts, a result that is confirmed when the rate of inflation is replaced in the maturity regressions by the conditional variance of inflation stemming from a standard GARCH model for inflation, previously found to be the best fit for inflation uncertainty in Turkey.
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