The Appalachian region has experienced persistently higher poverty and lower earnings than the rest of the United States. We examine whether skill differentials or differences in the returns to those skills lie at the root of the Appalachian wage gap. Using census data, we decompose the Appalachian wage gap using both mean and full distribution methods. Our findings suggest that significant upgrading of skills within the region has prevented the gap from widening over the last 20 years. Additionally we find that urban areas within Appalachia have not experienced the rise in returns to skills as in non-Appalachian urban areas.

This paper reviews empirical evidence on the use of bank lines of credit as a source of corporate liquidity. Traditional explanation for lines of credit is that they provide insurance against liquidity shocks, in much the same as way hoarding cash does. However, recent empirical research suggests that access to lines of credit is contingent on the credit quality of the borrower as well as the financial condition of the lender. These findings suggest that lines of credit are an imperfect substitute for cash as a source of corporate liquidity.