Three economists, Joel Mokyr from the United States, Peter Howitt, and Philippe Aghion from France were awarded the 2025 Nobel Prize in Economics on Monday, October 13 for their research on innovation and the role of “creative destruction” in driving economic growth and improving global living standards.
Their research explains how technology generates new products and production methods, replacing old ways and ultimately leading to higher living standards, health, and quality of life.
The Royal Swedish Academy of Sciences, responsible for awarding the prize, stated in a press release, “For the first time in the history of the world, sustained economic growth has occurred over the past two centuries. This has lifted a large population out of poverty and laid the foundation for our prosperity.”
These three laureates, through their complementary research methods, have collectively elucidated how economies can sustain continuous growth.
Mokyr, a Dutch-born Israeli-American professor currently teaching at Northwestern University in the U.S., is an economic historian who identifies the prerequisites for sustained growth through historical data, emphasizing the necessity for society to remain open to new ideas and change.
Aghion, a French economist, also holds professorships at institutions in France, such as the Collège de France and INSEAD, as well as the London School of Economics in the UK. Howitt, a Canadian-American professor, works at Brown University in the U.S. They utilized rigorous mathematical models to describe the mechanism of “creative destruction,” where new technologies continually replace old industries, thus driving growth.
The Royal Swedish Academy pointed out that these laureates also underscored that such progress is not automatic. They stated, “Throughout much of human history, economic stagnation rather than growth has been the norm. Their research indicates that we must be aware of and address the threats to sustained growth.”
The Nobel Memorial Prize in Economic Sciences, officially named the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the last Nobel Prize awarded this year, with a total amount of 11 million Swedish Krona (equivalent to 1.2 million USD).
Mokyr received half of the prize money, while Aghion and Howitt shared the other half.
The Economics Prize was established relatively late, first awarded in 1969. Like the prizes in Medicine, Physics, Chemistry, Peace, and Literature, it is presented annually in Stockholm. Past notable laureates include former Federal Reserve Chairman Ben Bernanke, renowned economists Paul Krugman, and Milton Friedman.