Nobel Prize in Economics goes to trio for explaining innovation-driven eco growth

Stockholm: Three economists — Joel Mokyr, Philippe Aghion and Peter Howitt — have been awarded the 2025 Nobel Memorial Prize in Economic Sciences for their pioneering research on how innovation fuels economic growth and how new technologies replace older ones, a dynamic process known as “creative destruction.”

The Royal Swedish Academy of Sciences said the trio’s work has “transformed our understanding of the forces driving long-term growth,” offering both historical and mathematical insight into the mechanisms that sustain innovation and productivity.

Mokyr, 79, a Dutch-born economic historian at Northwestern University, was recognized for tracing the roots of technological progress through centuries of historical evidence. Aghion, 69, of the Collège de France and the London School of Economics, and Howitt, 79, of Brown University, were cited for developing mathematical models that capture how innovation leads to cycles of renewal and obsolescence in the economy. “This year’s laureates have deepened our grasp of how innovation leads to progress,” said John Hassler, chair of the Nobel committee for economic sciences. “Their work shows that economic growth cannot be taken for granted — societies must preserve the institutions that sustain creative destruction.”

Mokyr, reached at his home early Monday, said he was “completely taken aback” by the news. “People always say this, but in this case I am being truthful — I had no clue that anything like this was going to happen,” he told the Associated Press. “My students once asked me if I thought I’d win a Nobel. I said I was more likely to be elected Pope — and I’m Jewish, by the way.”

Turning 80 next summer, Mokyr said retirement was not on his mind. “This is the type of job I dreamed about my entire life,” he said.

Aghion, speaking to reporters by phone during the press conference in Stockholm, said he was equally surprised. “I can’t find the words to express what I feel,” he said, adding that he plans to invest his prize money in his research laboratory. Asked about the global economic climate, he noted, “I am not welcoming the protectionist way in the US. That is not good for world growth and innovation.”

The Nobel committee highlighted Mokyr’s contribution in showing that technological progress requires not only practical knowledge but also scientific understanding of why innovations work. Aghion and Howitt, in a 1992 paper, built a mathematical model that formalised Schumpeter’s theory of creative destruction—the idea that each wave of innovation replaces the old with the new, driving progress but also upheaval.

Aghion has also been active in public policy, helping design French President Emmanuel Macron’s 2017 economic platform. In 2024, he co-chaired the French Artificial Intelligence Commission, which proposed 25 recommendations to make France a leader in AI development.

The 11 million Swedish kronor (approximately $1.2 million) prize will be split between the three economists, with half going to Mokyr and the other half shared by Aghion and Howitt. Each laureate will also receive an 18-carat gold medal and a diploma.

Formally called the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, the award was established in 1968 by Sweden’s central bank and has since been presented 57 times to 99 laureates — only three of them women. Though technically not one of Nobel’s original prizes, it is conferred alongside the others on December 10, the anniversary of Alfred Nobel’s death.

Last week, Nobel honors were announced in medicine, physics, chemistry, literature, and peace.

with agency inputs