The 2025 Nobel Prize in Economics has been awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their groundbreaking research on how innovation and "creative destruction" fuel economic growth and improve living standards globally.
The Royal Swedish Academy of Sciences, which administers the prize, highlighted the trio’s work in explaining how technological advancements lead to new products and methods, replacing outdated ones and driving sustained economic progress.
Mokyr, a professor at Northwestern University, secured half of the 11 million Swedish crowns ($1.2 million) prize for his studies on the conditions necessary for technology-driven growth.
Aghion, from the Collège de France, INSEAD, and the London School of Economics, and Howitt, from Brown University, shared the other half for their analysis of "creative destruction," a process where innovation displaces older systems, fostering economic advancement.
Their work underscores that sustained growth, which has lifted millions out of poverty over the past two centuries, is not guaranteed and faces threats from trade barriers and monopolistic practices.
Challenges to Future Growth
The laureates’ research comes amid global debates on economic stagnation, trade policies, and the rise of artificial intelligence.
Aghion emphasized the need for policies to prevent tech monopolies from stifling new innovators, stating, “Some superstar firms may end up dominating everything and inhibiting potential entry of new innovators.”
He also warned that protectionist measures, such as tariffs, could hinder global growth and innovation.
The Academy noted that economic stagnation has been the historical norm, urging vigilance to maintain the mechanisms of creative destruction.
The award, formally the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, highlights the critical role of innovation in shaping a prosperous future while acknowledging challenges like climate change and inequality that complicate growth’s benefits.