The 2025 Nobel Memorial Prize in Economic Sciences has been awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their research on how innovation and ‘creative destruction’ drive long-term economic expansion. Announced by the Royal Swedish Academy of Sciences on October 13, the prize recognizes Mokyr with half the award for identifying the historical and institutional foundations of sustained growth, while Aghion and Howitt share the other half for developing a mathematical model explaining how new technologies displace outdated ones.
The prize, worth 11 million Swedish crowns (approximately $1.2 million), underscores how technological advancement has led to improved living standards, health outcomes, and overall quality of life globally. For the first time in history, the world has experienced continuous economic growth over the past 200 years, lifting millions out of poverty. However, the laureates emphasize that such progress is not guaranteed.
Mokyr, a professor at Northwestern University, analyzed historical patterns to show that sustained growth requires not only scientific discovery but also practical know-how and institutions that support change. Aghion, affiliated with the Collège de France, INSEAD, and the London School of Economics, and Howitt, of Brown University, introduced a formal economic model in 1992 demonstrating how competition fuels innovation. In their framework, companies strive to surpass rivals by developing superior products, leading to a cycle where outdated technologies become obsolete.
John Hassler, a member of the Nobel Committee, noted that Mokyr used historical insights to uncover the prerequisites for growth, while Aghion and Howitt provided a quantitative framework for understanding ‘creative destruction.’
During a press conference, Aghion expressed surprise at the honor, stating he was “still speechless.” He urged Europe to adopt lessons from the U.S. and China by balancing competition policy with strategic industrial support in key sectors such as defense, climate technology, artificial intelligence, and biotechnology.
The economics prize, established in 1969, differs from the original Nobel awards created by Alfred Nobel. Past recipients include Milton Friedman, Paul Krugman, and Ben Bernanke. Last year’s prize went to Simon Johnson, James Robinson, and Daron Acemoglu for their work on how colonial institutions influence long-term development.
The award ceremony will take place in Stockholm in December.
— news from Reuters
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Trio win 2025 Nobel economics prize for work on innovation and ‘creative destruction’
STOCKHOLM, Oct 13 (Reuters) – Joel Mokyr, Philippe Aghion and Peter Howitt won the 2025 Nobel economics prize for their work on how innovation and the forces of “creative destruction” can drive economic growth, the Royal Swedish Academy of Sciences said on Monday. n nThe prestigious award, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the final prize to be given out this year and is worth 11 million Swedish crowns ($1.2 million). n nSign up here. n
The prize winners ‘ work explains how technology gives rise to new products and production methods which replace old ones, resulting in a better standard of living, health and quality of life for people around the globe, the Academy said. n n”Over the last two centuries, for the first time in history, the world has seen sustained economic growth. This has lifted vast numbers of people out of poverty and laid the foundation of our prosperity,” the prize-awarding body said in a statement. n nECONOMIC GROWTH IS NOT GUARANTEED n nThe laureates have also shown that such progress cannot be taken for granted. n n”Economic stagnation, not growth, has been the norm for most of human history. Their work shows that we must be aware of, and counteract, threats to continued growth,” the Academy said. n nMokyr is a professor at Northwestern University, in Evanston in the United States, while Aghion is professor at the College de France and INSEAD, in Paris, and at the London School of Economics and Political Science, in Britain. n nHowitt is a professor at Brown University, in Providence in the United States. n nMokyr was awarded half the prize with the other half being shared between Aghion and Howitt. n n”Joel Mokyr used historical observations to identify the factors necessary for sustained growth based on technological innovations,” John Hassler, member of the Nobel Committee, said. n n”Philippe Aghion and Peter Howitt produced a mathematical model of creative destruction, an endless process in which new and better products replace the old.” n nWINNER SAYS EUROPE SHOULD LEARN FROM U.S. AND CHINA n nSpeaking by phone at the press conference, Aghion said he was “still speechless.” n n”I did not expect it at all so I can ‘t find the words to express what I feel,” he said. n nIn pursuit of economic growth, Aghion called on Europe to learn from the U.S. and China, which he said have “found ways to reconcile competition and industrial policy.” n n”In Europe, in the name of competition policy, we became very anti any form of industrial policy. I think we need to evolve on that and find ways to reconcile industrial policy in areas like defense, climate, AI, biotech, where we are very good, we have very good research there,” Aghion said. n nPREVIOUS WINNERS INCLUDE KRUGMAN AND FRIEDMAN n nThe awards for medicine, physics, chemistry, peace and literature were announced last week. n nThose prizes were established in the will of Swedish dynamite inventor and businessman Alfred Nobel and have been handed out since 1901, with a few interruptions mostly due to the world wars. n nThe economics prize was established much later, being given out first in 1969 when it was won by Norway ‘s Ragnar Frisch and Jan Tinbergen from the Netherlands for work in dynamic economic modelling. Tinbergen ‘s brother Nikolaas also won a prize, taking home Medicine in 1973. n nWhile few economists are household names, relatively well-known winners include former U.S. Federal Reserve chairman Ben Bernanke, and Paul Krugman and Milton Friedman. n nLast year ‘s economics award went to U.S.-based academics Simon Johnson, James Robinson and Daron Acemoglu for research that explored the relationship between colonisation and the establishment of public institutions to explain why some countries have been mired in poverty for decades. n n($1 = 9.5112 Swedish crowns) n nReporting by Simon Johnson, Niklas Pollard, Johan Ahlander and Greta Rosen Fondahn in Stockholm; Mark John in London; Editing by Toby Chopra