The Nobel Prize In Economics 2025 was awarded to Joel Mokyr, Philippe Aghion and Peter Howitt — the team which has explained the concept of "innovation-driven economic growth".
The prize, amounting to 11 million Swedish kronor, has been divided with one half going to Joel Mokyr of Northwestern University, and the other half shared between Philippe Aghion of the London School of Economics; and Peter Howitt of Brown University.
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The three laureates have been recognised for their pioneering work in explaining how innovation and technological progress drive long-term economic growth. Their research connects the historical, theoretical and mathematical foundations of what makes economies thrive and societies prosper over time.
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Over the past two centuries, global economic growth has reached unprecedented levels, lifting billions out of poverty. Mokyr, Aghion and Howitt's collective work sheds light on how the cycle of invention, improvement and replacement fuels this continuous process of development.
Tension In Capitalism
The laureates' research collectively underscores a crucial tension in capitalism: innovation drives prosperity, but it also disrupts the status quo. Managing this tension — ensuring that competition remains fair, that monopolies do not suppress new ideas, and that societies adapt to technological change — is vital for maintaining long-term growth.
"The laureates' work shows that economic growth cannot be taken for granted,” said John Hassler, Chair of the Committee for the Prize in Economic Sciences. “We must uphold the mechanisms that underlie creative destruction, so that we do not fall back into stagnation.”
About the Nobel Winners
Born in Leiden, the Netherlands in 1946, Joel Mokyr received his PhD from Yale University in 1974 and currently serves as Professor at Northwestern University. His research blends economic history with the economics of innovation, exploring why the modern era diverged from centuries of stagnation.
Mokyr's central insight is that sustained growth requires more than just practical inventions — it needs a scientific understanding of why innovations work. Before the Industrial Revolution, technological advances often lacked such theoretical underpinnings, limiting cumulative progress. Mokyr also highlighted the importance of open, inquisitive societies that value experimentation and tolerate change, creating fertile ground for continuous innovation.
Philippe Aghion (born 1956, Paris) and Peter Howitt (born 1946, Canada) revolutionised growth theory through their model of “creative destruction”, first presented in a landmark 1992 paper.
Building on ideas originally introduced by Joseph Schumpeter, their work provided the first formal mathematical framework showing how new technologies and firms replace older ones — a dynamic process that both fuels growth and creates conflict. When new products and processes emerge, they enhance productivity and living standards, but they also displace established firms and workers.
Their model remains a cornerstone of modern growth economics, influencing everything from innovation policy and competition law to debates on industrial strategy and inequality.
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