A note on the competitive search model of Azariadis and Pissarides
In this short note, I reinvestigate a recent paper of Azariadis and Pissarides (Unemployment dynamics with international capital mobility, European Economic Review, 2007(51), 27-48) where wages are determined in a competitive search setting. I show that their equation on the equilibrium wage rate is incorrect. I derive a correct wage equation and perform the numerical analysis. The correction does not change their result and high capital mobility still raises the variability of the unemployment rate.
References listed on IDEAS
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- Azariadis, Costas & Pissarides, Christopher A., 2007.
"Unemployment dynamics with international capital mobility,"
European Economic Review,
Elsevier, vol. 51(1), pages 27-48, January.
- Costas Azariadis & Christopher Pissarides, 2007. "Unemployment dynamics with international capital mobility," LSE Research Online Documents on Economics 2476, London School of Economics and Political Science, LSE Library.
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