The 2025 Nobel Memorial Prize in Economic Sciences has been awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their pioneering research on innovation and economic growth, the Royal Swedish Academy of Sciences announced on October 13.
The prize marks the final award of this year’s Nobel season.
According to the Nobel committee, the trio was recognised “for having explained innovation-driven economic growth.”
Joel Mokyr received one half of the prize “for having identified the prerequisites for sustained growth through technological progress,” while the other half was shared by Philippe Aghion and Peter Howitt “for the theory of sustained growth through creative destruction.”
How their work changed economic thinking
Joel Mokyr, a Dutch-Israeli-American economic historian at Northwestern University, employed historical evidence to examine how societies transitioned from stagnation to self-sustaining economic growth.
His research demonstrated that technological progress becomes continuous only when innovations are supported by a culture that values knowledge, experimentation, and openness to change.
Mokyr’s studies connected the industrial revolution to a period in Europe characterised by curiosity and tolerance of new ideas.
He argued that innovation could flourish only when people not only knew how to make things work but also understood why they worked. This scientific understanding, he maintained, allowed societies to build on past discoveries and sustain progress across generations.
Philippe Aghion of the Collège de France and Peter Howitt of Brown University were honoured for developing the influential theory of “creative destruction.”
Their 1992 paper presented a model demonstrating how economic growth occurs through cycles in which new innovations replace old technologies and products.
Originally inspired by economist Joseph Schumpeter, the idea of creative destruction was formalised mathematically by Aghion and Howitt.
Their research explained how progress involves both creation and loss. New companies and technologies emerge while outdated ones disappear. This process, though sometimes disruptive, drives long-term growth by promoting continuous innovation and competition.
Significance of their research
The Nobel committee said the trio’s work has helped economists and policymakers better understand the roots of economic progress.
Their findings have influenced government policies on supporting innovation, regulating markets, and balancing the needs of established industries with the opportunities offered by new technologies.
The concept of creative destruction is widely used to explain how technological revolutions, including advances in artificial intelligence, renewable energy, and biotechnology, reshape economies.
Mokyr’s historical analysis complements this by showing how cultural and institutional openness can determine whether societies embrace or resist such change.
About the prize and previous winners
The prize, officially known as The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968 by Sweden’s central bank in honour of Alfred Nobel, the founder of the Nobel prizes.
Though not one of the original Nobel awards, it is presented alongside them each year on 10 December, the anniversary of Nobel’s death.
Since its inception, the economics prize has been awarded 56 times to 96 laureates. In 2024, Daron Acemoglu, Simon Johnson, and James A. Robinson received the award for their research on why some countries grow wealthy while others remain poor, highlighting the role of open, inclusive institutions in fostering prosperity.
The economics award concludes the 2025 Nobel season, following announcements in medicine, physics, chemistry, literature, and peace earlier in the week.
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