In a year marked by fierce debates over the future of technology and economic policy, three leading economists—Joel Mokyr, Philippe Aghion, and Peter Howitt—were jointly awarded the 2025 Nobel Memorial Prize in Economic Sciences on October 13, in Stockholm. Their groundbreaking work on the role of innovation and the dynamic process of "creative destruction" has not only reshaped the field of economics but also offered crucial insights for policymakers grappling with the challenges of a rapidly evolving global economy.
The Royal Swedish Academy of Sciences, announcing the prize amid a global backdrop of rapid artificial intelligence (AI) development and rising protectionist sentiment, credited the trio with pioneering the explanation of innovation-driven economic growth. According to Bloomberg, the Academy lauded their collective efforts in identifying what drives growth and how creative destruction helps fuel it. Their research, spanning both historical analysis and mathematical modeling, has deepened understanding of how new technologies replace outdated ones, propelling economies forward.
Joel Mokyr, an economic historian at Northwestern University, secured half of the 11 million Swedish kronor prize—nearly $1.2 million—while the remaining half was split between Philippe Aghion, who holds positions at the Collège de France, INSEAD, and the London School of Economics, and Peter Howitt of Brown University. As reported by the Associated Press, Mokyr, 79, was stunned 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 said, adding with a touch of humor, "I told [my students] that I was more likely to be elected Pope than to win the Nobel Prize in economics – and I am Jewish by the way." Despite approaching his 80th birthday, Mokyr made it clear he has no plans to retire, describing his academic work as "the type of job that I dreamed about my entire life."
The Nobel committee highlighted Mokyr’s use of historical sources to identify the prerequisites for sustained growth through technological progress. As The Guardian explained, Mokyr’s research demonstrates that for innovations to succeed one after another in a self-generating process, societies must not only know that something works, but also understand the scientific reasoning behind it. This insight has shed light on why some periods in history have seen explosive economic growth while others have stagnated.
Philippe Aghion and Peter Howitt, meanwhile, were recognized for their collaborative work constructing mathematical models to explain the mechanics of creative destruction—a concept famously articulated by economist Joseph Schumpeter in his 1942 book, Capitalism, Socialism and Democracy. Their 1992 article offered a formal framework for understanding how beneficial innovations continually replace older technologies and businesses, driving productivity and prosperity. Aghion, a French economist, has also played a role in shaping real-world policy, advising French President Emmanuel Macron’s economic program and co-chairing the 2024 Artificial Intelligence Commission, which made 25 recommendations to position France as a leader in AI.
Speaking at the prize announcement, Aghion voiced concerns about mounting trade tensions and the rise of protectionism, particularly referencing recent U.S. policies. "I am not welcoming the protectionist way in the US. That is not good for… world growth and innovation," he told the assembled press, as reported by The Guardian. He went on to warn that "dark clouds" were gathering over the global economy, noting that barriers to trade and openness could stifle the very innovation that has underpinned economic expansion over the past two centuries. Aghion emphasized the importance of fostering innovation in green industries and implementing strong competition policies to prevent monopolistic dominance by tech giants. "Some superstar firms may end up dominating everything and inhibiting potential entry of new innovators. So how can we make sure that today’s innovators will not stifle future entry and innovation?" he asked, highlighting the delicate balance policymakers must strike in the digital age.
Peter Howitt, a Canadian-born economist at Brown University, has worked closely with Aghion to unravel the mechanisms behind sustained economic growth. Their joint research has become foundational in modern economic thought, influencing both academic theory and practical policy. The Nobel committee’s chair, John Hassler, summarized the significance of their work: "The laureates’ work shows that economic growth cannot be taken for granted. We must uphold the mechanisms that underlie creative destruction, so that we do not fall back into stagnation."
The context of this year’s award is particularly noteworthy. Since the 2008 financial crisis, many developed economies have struggled with sluggish growth, stagnant productivity, and mounting political tensions. According to Dow Jones, the Nobel organization credited Mokyr, Aghion, and Howitt with helping to deepen understanding of why economic growth in the past two centuries has reached historically high and relatively stable levels. Their insights come at a time when governments worldwide are seeking ways to revive flagging economies and ensure that the benefits of innovation are broadly shared.
The Nobel Memorial Prize in Economic Sciences, officially known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968 by Sweden’s central bank. Although Nobel purists note that it is technically not one of the original Nobel Prizes, it is awarded alongside the others each December 10, the anniversary of Alfred Nobel’s death. Since its inception, only 99 laureates have been recognized, and just three have been women—a statistic that continues to spark debate about diversity in the field.
In addition to the monetary award, the winners receive an 18-carat gold medal and a diploma. Aghion told reporters he would invest his share of the prize money into his research laboratory, underscoring his commitment to furthering the study of innovation and economic growth. As the world faces unprecedented technological change and economic uncertainty, the work of Mokyr, Aghion, and Howitt offers both a roadmap and a warning: progress is neither automatic nor inevitable, and sustaining it requires vigilance, openness, and a willingness to embrace the new while managing its risks.
With their research now recognized at the highest level, the three laureates have set a new benchmark for understanding the forces that shape our economies—and, by extension, our lives.
