The 2025 Nobel Prize in Economics has been awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their pivotal research on how innovation drives economic growth. Joel Mokyr is honored for his work in identifying the essential conditions for consistent growth powered by technological progress. Philippe Aghion and Peter Howitt share the other half of the prize for developing the theory of “creative destruction” as a driver of sustained economic expansion.
The Royal Swedish Academy of Sciences noted Mokyr’s contribution in establishing that ongoing innovation requires more than just practical application; it demands a deep scientific understanding of underlying principles. Mokyr is affiliated with Northwestern University. Aghion, from the College de France and the London School of Economics, and Howitt, of Brown University, are recognized for their influential 1992 paper that mathematically modeled creative destruction. This process involves the emergence of new products and technologies that render older ones obsolete, leading to market transformation.
In commenting on the award, the committee emphasized that economic growth is not an automatic outcome and requires the active nurturing of forces like creative destruction to avoid periods of stagnation. This year’s laureates’ focus on innovation contrasts with the previous year’s award, which explored the socio-political factors behind why some nations thrive while others struggle.