Stockholm, Sweden: The 2025 Nobel Prize in Economics has been awarded to three researchers who explained how innovation and technological progress have driven sustained economic growth and prosperity. Joel Mokyr from Northwestern University, Illinois; Peter Howitt from Brown University, Rhode Island; and Philippe Aghion from the London School of Economics, UK, have been instrumental in helping economists and policymakers better understand the roots of economic progress and the conditions that foster innovation.
Collectively, these three researchers laid the foundation for modern theories explaining the origin of economic growth- proving how innovation, entrepreneurship and knowledge accumulation have driven long-term economic performance.
The never-ending cycle of technological innovation-where new products and production methods replace old ones with incremental value- have been the basis for sustained economic growth, resulting in a better standard of living and quality of life for people across the world.
“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,” John Hassler, Chair of the Committee for the prize in economic sciences, explained in a press release by the Royal Swedish Academy of Sciences.
The trio’s research has influenced how governments think about supporting innovation, regulating markets and balancing the needs of old industries while supporting the aspirations of new ones.
Joel Mokyr, born in the Netherlands in 1946, is a Professor at Northwestern University in the US. Using historical sources, he demonstrated how innovations have helped boost economic progress, especially since the dawn of the Industrial Revolution. Philippe Aghion and Peter Howitt also studied the mechanisms behind this sustained growth, using a mathematical model called the ‘creative destruction’ in an article in 1992. It demonstrated how a better product had threatened the companies that sold the older products.
The three economists will be awarded 11 million Swedish kronor, with one-half going to Joel Mokyr and the second half to be split between Philippe Aghion and Peter Howitt.
