The 2025 Nobel Prize in Economic Sciences has been presented to three economists—Joel Mokyr, Philippe Aghion, and Peter Howitt—for their groundbreaking analysis of how innovation drives sustained economic development. The award, announced by the Royal Swedish Academy of Sciences, recognizes decades of research into the mechanisms that enable economies to grow through technological advancement.
Mokyr, a professor at Northwestern University and affiliated with the Eitan Berglas School of Economics, was awarded half of the prize. The other half was jointly given to Aghion, who holds positions at the Collège de France, INSEAD, and the London School of Economics, and to Howitt, Professor Emeritus at Brown University.
The committee emphasized that the laureates helped clarify how innovation does not occur in isolation but is shaped by competition, institutional frameworks, and the willingness of societies to embrace change. Their collective work shows that without supportive environments, new ideas may be suppressed by entrenched interests seeking to protect their market position.
Mokyr’s historical investigations focused on the conditions that allowed the Industrial Revolution to generate lasting progress, unlike earlier periods of invention that failed to produce continuous growth. He argued that successful innovation ecosystems require not just technical know-how but also a culture that values scientific reasoning and understands causal mechanisms.
Aghion and Howitt contributed through formal modeling, demonstrating how newer, more efficient products gradually displace older ones in competitive markets. Their frameworks provided a rigorous foundation for Schumpeter’s theory of “creative destruction,” showing how economic renewal can be modeled and understood within long-term growth trajectories.
The prize committee stressed that economic advancement is not inevitable. “We must actively sustain the institutions and incentives that foster innovation,” said John Hassler, Chair of the Economics Prize Committee. “Otherwise, stagnation may follow.”
— news from The Wall Street Journal
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Nobel Economics Prize Awarded to Trio for Work on Innovation-Driven Growth The Wall Street Journal