Economics Nobel to be shared by three for research on innovation-driven economic growth

The Royal Swedish Academy of Sciences has decided to award the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Joel Mokyr, Philippe Aghion and Peter Howitt “for having explained innovation-driven economic growth”.

One half of the prize will go to Mokyr “for having identified the prerequisites for sustained growth through technological progress” and the other half jointly to Aghion and Howitt “for the theory of sustained growth through creative destruction.”

The Hindu Explains: Economics Nobel Prize 2025: How innovation drives economic growth

Joel Mokyr used historical sources as one means to uncover the causes of sustained growth becoming the new normal. Philippe Aghion and Peter Howitt also studied the mechanisms behind sustained growth. In an article from 1992, they constructed a mathematical model for what is called creative destruction: when a new and better product enters the market, the companies selling the older products lose out, the Nobel Committee said in a media release.

The Netherlands-born Joel Mokyr is Professor at Northwestern University, United States, while Philippe Aghion is Professor at Collège de France and INSEAD, Paris, and The London School of Economics and Political Science, UK. Peter Howitt is Professor at Brown University, United States.

Mr. Mokyr was still trying to get his morning coffee when he was reached on the phone by an AP reporter, and said he was shocked to win the prize.

“People always say this, but in this case I am being truthful — I had no clue that anything like this was going to happen,” he said.

His students had asked him about the possibility that he would win the Nobel, he said. “I told them that I was more likely to be elected Pope than to win the Noel Prize in economics — and I am Jewish by the way.” Mr. Mokyr will turn 80 next summer but said he has no plans to retire. “This is the type of job that I dreamed about my entire life,” he said.

Mr. Aghion said he was shocked by the honour. “I can’t find the words to express what I feel,” he said by phone to the press conference in Stockholm. He said he would invest his prize money in his research laboratory.

Asked about current trade wars and protectionism in the world, Mr. Aghion said that: “I am not welcoming the protectionist way in the U.S. That is not good for … world growth and innovation.” The winners were credited with better explaining and quantifying “creative destruction,” a key concept in economics that refers to the process in which beneficial new innovations replace — and thus destroy — older technologies and businesses. The concept is usually associated with economist Joseph Schumpeter, who outlined it in his 1942 book “Capitalism, Socialism and Democracy.” The Nobel committee said Mr. Mokyr “demonstrated that if innovations are to succeed one another in a self-generating process, we not only need to know that something works, but we also need to have scientific explanations for why.” Aghion and Howitt studied the mechanisms behind sustained growth, including in a 1992 article in which they constructed a mathematical model for creative destruction.

Mr. Aghion helped shape French President Emmanuel Macron’s economic program during his 2017 election campaign. More recently, Mr. Aghion co-chaired the Artificial Intelligence Commission, which in 2024 submitted a report to Macron outlining 25 recommendations to position France as a leading force in the field of AI.

“The laureates’ work shows that 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,” said John Hassler, chair of the committee for the prize in economic sciences.

Last year’s award went to three economists — Daron Acemoglu, Simon Johnson and James A. Robinson — whose studies explained why some countries are rich and others poor.

Formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, the Economics Nobel was established in 1968 by Sweden’s central bank.

The award, though technically not a Nobel Prize, is presented together with the others on December 10, the death anniversary of Alfred Nobel. The prize consists of a diploma, a gold medal and a $1.2 million cheque.

Nobel announcements kicked off last week with the prize for medicine or physiology announced on October 6, followed by physics, chemistry, literature and peace.

With inputs from agencies