The Royal Swedish Academy of Sciences has announced that the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded to three distinguished scholars: Joel Mokyr, Philippe Aghion, and Peter Howitt. The trio is being honoured for their profound contributions to economic science, specifically for "having explained innovation-driven economic growth," a concept vital to understanding modern prosperity, reported The WP Times with reference to Nobelprize.
The Nobel Committee highlighted that the laureates' collective research has created a comprehensive framework that bridges historical analysis with modern growth theory, revealing how ideas and technological progress are the true engines of long-term global affluence.
Joel Mokyr, an economic historian based at Northwestern University, was awarded one half of the prize for his work "for having identified the prerequisites for sustained growth through technological progress." His research delved into historical sources to demonstrate that continuous, self-generating technological progress requires not only practical inventions but also a scientific understanding of why they work, alongside a societal openness to new ideas and change. Mokyr's findings illustrate the cultural and institutional conditions necessary to move an economy from sporadic bursts of innovation to enduring prosperity.
The other half of the prestigious award is jointly shared by Philippe Aghion of the Collège de France and Peter Howitt of Brown University. They were recognised "for the theory of sustained growth through creative destruction." Drawing inspiration from the work of economist Joseph Schumpeter, Aghion and Howitt developed a rigorous mathematical model explaining the dynamic process where new and superior innovations inevitably replace older products, technologies, and even industries. This "creative destruction," while often disruptive, is shown by their theory to be the fundamental mechanism that drives long-term economic expansion and lifts global living standards. Their model explores how incentives like market conditions and investment in research and development influence the pace of this transformative cycle.
The announcement of the final prize of the traditional Nobel Week, which ran from October 6 to 13, follows the naming of laureates in Physiology or Medicine, Physics, Chemistry, Literature, and the highly anticipated Nobel Peace Prize. The collective work of Mokyr, Aghion, and Howitt offers critical insights for policymakers grappling with challenges like productivity slowdowns and the management of rapid technological shifts, such as those related to artificial intelligence, reinforcing the crucial message that economic growth, especially that fueled by innovation, must be actively nurtured and protected.
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