2025 Nobel for economics goes to research on innovation and growth
Photo: Nobel Prize in Economics 2025 winners announced (Getty Images)
The winners of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel have been announced. The award was given to Joel Mokyr, Philippe Aghion, and Peter Howitt, according to the Nobel Foundation's press service.
What is known about the laureates' achievements
American economist Joel Mokyr received the award "for identifying the conditions for sustainable growth through technological progress".
French economist Philippe Aghion and American economist Peter Howitt were honored "for the theory of sustainable growth through creative destruction."
Mokyr used historical sources to understand how sustainable economic growth became possible, and when it turned into the "new normal." He demonstrated that for continuous innovation to occur, it is not enough to know that something works; it is also necessary to understand why it works and to have a scientific explanation.
This understanding was often lacking before the Industrial Revolution, which made it difficult to develop discoveries and inventions. Mokyr also emphasized the importance of a society's openness to new ideas and its readiness for change.
Aghion and Howitt, meanwhile, studied the mechanisms of sustainable growth. In their 1992 paper, they developed a mathematical model of a phenomenon they called "creative destruction," when a new, better product enters the market and companies selling older goods lose their position.
Innovation is "creative", as it brings something new, but at the same time "destructive" because the technology of its predecessors becomes obsolete..
The laureates each showed that creative destruction inevitably generates conflicts that must be managed constructively. Otherwise, innovation risks being blocked by companies or interest groups afraid of losing their advantages.
Who received the Nobel Prize in Economics last year
In 2024, the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was awarded to Daron Acemoglu, Simon Johnson, and James Robinson "for studies of how institutions are formed and affect prosperity."
Their work showed that differences in countries' wealth often stem from the kinds of institutions formed during colonization. Where power was built on exploitation and a lack of rights, development stalled. By contrast, inclusive institutions—with rights protection and citizen participation—created conditions for sustainable growth.
The researchers also demonstrated that when elites try to cling to power while ignoring the need for change, revolutions become inevitable. The only path to stability, they argued, lies in transferring power and establishing democracy.
Nobel Week 2025
This year's Nobel Week took place from October 6 to 13. Prizes have already been awarded in the following categories:
The Nobel Committee has also announced the 2025 Nobel Peace Prize laureate.
