Nobel Prize in Economics 2025

This year, the Nobel Prize in Economics was awarded to Joel Mokyr (Dutch, professor of economics in the United States), Philippe Aghion (professor and researcher at the Collège de France), and Canadian Peter Howitt. According to the Royal Swedish Academy of Sciences, they won the prize because they better than others explained "the process of destructive creation," a concept in economics that refers to the process by which innovations replace old technologies and businesses.

The Nobel Committee said Mokyr showed that if innovations occur in a self-generated process, we need to know not only that something is happening, but also the scientific explanations for why it happens. Aghion and Howitt studied the mechanism differently. In their 1992 article, they studied the mechanism of economic growth using a mathematical model of "destructive creation." Aghion, a researcher at the Collège de France and Insead, and the London School of Economics and Political Science (United Kingdom), conducted part of his research in France. The chairman of the Nobel Committee (Bank of Sweden; Sveriges Bank in Economic Sciences in Memory of Alfred Nobel) said: "His work shows that economic growth cannot be guaranteed. We must find out the mechanism that sustains creative destruction in a process of stagnation."

For most of human history, the standard of living changed considerably from one generation to the next. But all that was transformed by the Industrial Revolution, just over two centuries ago. Sporadic discoveries occurred that led to growth, but this growth always stalled over time. But, for the new Nobel laureates, "growth emerges from creative destruction." It is a creative process because it is based on innovation, but also destructive because old products become obsolete and lose their commercial value. In just two centuries, creative destruction has fundamentally transformed society.

Innovation, in all its forms, fosters and incentivizes the creation of disruptive technologies. Aghion has worked extensively in this field. The French laureate points out that creative destruction is the process by which new competitors replace traditional activities. Creative destruction is crucial, notes the 69-year-old French economist. “We don't need more.” American-Israeli Joel Mokyr, 79, won half of the prize “for having identified the prerequisites for sustained growth through technological progress.” Aghion, 69, and Howitt, 79, shared the other half “for the theory of sustained growth.”