The Nobel Memorial Prize in Economic Sciences for 2025 has been awarded to Joel Mokyr, Peter Howitt, and Philippe Aghion for their groundbreaking work on innovation and economic growth.
STOCKHOLM — The Nobel Memorial Prize in Economic Sciences for 2025 was awarded on October 13 to three distinguished economists: Joel Mokyr of Northwestern University, Peter Howitt of Brown University, and Philippe Aghion of the Collège de France and INSEAD in Paris, France. This trio was recognized for their significant contributions to understanding how innovation drives sustained economic growth.
According to the Royal Swedish Academy of Sciences, the prize was divided into two parts. One half was awarded to Mokyr “for having identified the prerequisites for sustained growth through technological progress.” The other half was jointly awarded to Aghion and Howitt “for the theory of sustained growth through creative destruction.”
The Academy highlighted the importance of the laureates’ work, stating, “Over the last two centuries, for the first time in history, the world has seen sustained economic growth. This has lifted vast numbers of people out of poverty and laid the foundation of our prosperity. This year’s laureates explain how innovation provides the impetus for further progress.”
Mokyr’s research has delved into the historical roots of innovation-driven growth. He argues that for technological advancements to build upon one another, societies must not only recognize that something works but also understand why it works. Prior to the Industrial Revolution, such scientific understanding was often lacking, which limited progress. Mokyr also emphasized the necessity of societies being open to new ideas and change to foster innovation.
Aghion and Howitt, on the other hand, developed a model known as “creative destruction.” This concept refers to the process by which new innovations render older technologies obsolete. Their influential 1992 paper articulated how progress emerges from this cycle: new products stimulate growth, even as outdated technologies and the companies that produce them are phased out.
The Academy noted that the laureates illustrate the need for constructive management of creative destruction. John Hassler, Chair of the Prize Committee, remarked, “Otherwise, innovation will be blocked by established companies and interest groups that risk being put at a disadvantage. Economic growth cannot be taken for granted. We must uphold the mechanisms that underlie creative destruction, so that we do not fall back into stagnation.”
This recognition of Mokyr, Howitt, and Aghion underscores the critical role of innovation in economic development and the importance of adapting to change in a rapidly evolving global landscape.
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