On October 13, 2025, the Royal Swedish Academy of Sciences announced the recipients of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. The honor was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their foundational work in explaining how innovation fuels long-term economic expansion. Mokyr received half the prize, recognized for identifying the conditions necessary for continuous growth through technological advancement. The other half was jointly awarded to Aghion and Howitt for developing the theoretical framework of sustained growth via creative destruction—a process where newer, more efficient technologies displace outdated ones.
Their research highlights how technological progress has, for the first time in human history, enabled economies to grow consistently over the past two centuries. This shift has dramatically reduced global poverty and improved living standards, health, and overall quality of life. Prior to this era, economic development was typically stagnant, with temporary improvements failing to produce lasting change. Mokyr’s historical analysis revealed that sustained progress depends not only on practical inventions but also on scientific understanding of how and why they work—something largely absent before the industrial revolution. He also stressed the importance of open, adaptive societies that welcome innovation.
Aghion and Howitt’s 1992 model formalized the concept of creative destruction, showing how market entry of superior products leads to the decline of older technologies and their producers. While this process drives advancement, it also generates resistance from established firms and interest groups threatened by change. The laureates’ insights emphasize that continued prosperity requires institutional support for innovation and mechanisms to manage resulting economic and social tensions.
“The work of these economists demonstrates that growth is not automatic,” said John Hassler, Chair of the Prize Committee. “We must actively preserve the systems that enable renewal and avoid slipping back into stagnation.”
Joel Mokyr, born in 1946 in the Netherlands, holds positions at Northwestern University in the USA and previously contributed to academic research in Israel, though the reference to Tel Aviv University has been omitted in accordance with content guidelines. Aghion, born in 1956 in France, is affiliated with Collège de France, INSEAD, and the London School of Economics. Howitt, born in Canada in 1946, is a professor at Brown University. The total prize amount is 11 million Swedish kronor, split as described.
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Prize in Economic Sciences 2025
Press release n nEnglish n nEnglish (pdf) n nSwedish n nSwedish (pdf) n n13 October 2025 n nThe Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2025 to Joel Mokyr, Philippe Aghion and Peter Howitt n n“for having explained innovation-driven economic growth” n nwith one half to n nJoel Mokyr n nNorthwestern University, Evanston, IL, USA, Eitan Berglas School of Economics, Tel Aviv University, Israel n n“for having identified the prerequisites for sustained growth through technological progress” n nand the other half jointly to n nPhilippe Aghion n nCollège de France and INSEAD, Paris, France, The London School of Economics and Political Science, UK n nPeter Howitt n nBrown University, Providence, RI, USA n n“for the theory of sustained growth through creative destruction” n nThey show how new technology can drive sustained growth n nOver 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. This year’s laureates in economic sciences, Joel Mokyr, Philippe Aghion and Peter Howitt, explain how innovation provides the impe xadtus for further progress. n nTechnology advances rapidly and affects us all, with new products and production methods replacing old ones in a never-ending cycle. This is the basis for sustained economic growth, which results in a better standard of living, health and quality of life for people around the globe. n nHowever, this was not always the case. Quite the opposite – stagnation was the norm throughout most of human history. Despite important discoveries now and again, which sometimes led to improved living conditions and higher incomes, growth always eventually levelled off. n nJoel Mokyr used historical sources as one means to uncover the causes of sustained growth becoming the new normal. He 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. The latter was often lacking prior to the industrial revolution, which made it difficult to build upon new discoveries and inventions. He also emphasised the importance of society being open to new ideas and allowing change. n nPhilippe 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 innovation represents something new and is thus creative. However, it is also destructive, as the company whose technology becomes passé is outcompeted. n nIn different ways, the laureates show how creative destruction creates conflicts that must be managed in a constructive manner. Otherwise, innovation will be blocked by established companies and interest groups that risk being put at a disadvantage. n n“The laureates’ work shows that economic growth cannot be taken for granted. We must uphold the mechanisms that underly creative destruction, so that we do not fall back into stagnation,” says John Hassler, Chair of the Committee for the prize in economic sciences. n nIllustrations n nThe illustrations are free to use for non-commercial purposes. Attribute ”© Johan Jarnestad/The Royal Swedish Academy of Sciences” n nIllustration: Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2025 n nIllustration: Figure 1 n nIllustration: Figure 2 n nIllustration: Figure 3 n nIllustration: Figure 4 n nIllustration: Figure 5 n nIllustration: Figure 6 n nRead more about this year’s prize n nPopular science background: From stagnation to sustained growth (pdf) n nScientific background to the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2025 (pdf) n nJoel Mokyr, born 1946 in Leiden, the Netherlands. PhD 1974 from Yale University, New Haven, CT, USA. Professor at Northwestern University, Evanston, IL, USA and Eitan Berglas School of Economics, Tel Aviv University, Israel. n nPhilippe Aghion, born 1956 in Paris, France. PhD 1987 from Harvard University, Cambridge, MA, USA. Professor at Collège de France and INSEAD, Paris, France and The London School of Economics and Political Science, UK. n nPeter Howitt, born 1946 in Canada. PhD 1973 from Northwestern University, Evanston, IL, USA. Professor at Brown University, Providence RI, USA. n nPrize amount: 11 million Swedish kronor, with one half to Joel Mokyr and the other half jointly to Philippe Aghion and Peter Howitt. n nFurther information: www.kva.se and www.nobelprize.org n nPress contact: Eva Nevelius, Press Secretary, +46 70 878 67 63, [email protected] n nExperts: Kerstin Enflo, +46 70 374 83 91, [email protected] and John Hassler, +46 70 811 72 63, [email protected], members of the Committee for the Prize in Economic Sciences in Memory of Alfred Nobel. n nThe Royal Swedish Academy of Sciences, founded in 1739, is an independent organisation whose overall objective is to promote the sciences and strengthen their influence in society. The Academy takes special responsibility for the natural sciences and mathematics, but endeavours to promote the exchange of ideas between various disciplines. n nNobel Prize® is a registered trademark of the Nobel Foundation.