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.