The 2025 Nobel Prize in Economic Sciences was awarded on Monday to American-Israeli scholar Joel Mokyr, French economist Philippe Aghion, and Canadian researcher Peter Howitt for their groundbreaking work on how technological innovation fuels sustained economic growth.
Mokyr, 79, received half of the prize “for having identified the prerequisites for sustained growth through technological progress,” according to the Royal Swedish Academy of Sciences. Aghion, 69, and Howitt, 79, shared the remaining half “for the theory of sustained growth through creative destruction.”
Chairman of the Nobel economics committee, John Hassler, told reporters that the trio’s research answers fundamental questions about the role of innovation in driving economic progress and maintaining long-term growth.
“During almost all of humankind’s history, living standards did not change noticeably from generation to generation. Economic growth was, on average, zero, and stagnation was the norm,” Hassler said, adding that over the past two centuries, “things have been very different.”
‘Creative Destruction’
Committee member Kerstin Enflo highlighted that “during the last 200 years, the world has seen more economic growth than ever before in human history.” However, she cautioned that “200 years is still just a short period compared to the long-run history of stagnation that we saw before.”
She emphasized that the laureates’ work “reminds us that we should not take progress for granted. Instead, society must keep an eye on the factors that generate and sustain economic growth.”
Mokyr, a professor at Northwestern University in the United States, was praised for using historical research to uncover how technological and institutional developments set the foundation for modern economic expansion.
Aghion and Howitt, meanwhile, developed a mathematical model for “creative destruction,” a process describing how new innovations displace outdated technologies or products, driving both disruption and renewal in markets. “When a new and better product enters the market, the companies selling the older products lose out,” the Nobel jury explained.
‘Openness’
Reacting to the announcement, Aghion told reporters by phone, “I can’t find the words to express what I feel. I’m still speechless. It came really as a huge surprise.”
Discussing current economic challenges, he warned that recent trade barriers could undermine global progress. “Openness is a driver of growth. Anything that gets in the way of openness is an obstacle to growth,” he said, referencing steep tariffs imposed since US President Donald Trump’s return to the White House.
Aghion also cautioned Europe against falling behind in technological innovation. “European countries have to realise that we should no longer let the US and China become technological leaders and lose to them,” he remarked.
A Modern Addition to the Nobel Legacy
Unlike the original five prizes established in Alfred Nobel’s 1896 will, the economics prize was introduced in 1968 through a donation by Sweden’s central bank. Critics have at times labeled it “a false Nobel,” but it is awarded under the same rigorous process by the Royal Swedish Academy of Sciences.
This year’s Nobel season also celebrated groundbreaking achievements in other fields—from discoveries in the human immune system and advancements in quantum mechanics to innovations in molecular architecture.
Hungarian author László Krasznahorkai received the Nobel Prize in Literature for his exploration of postmodern dystopia and melancholy, while Venezuelan opposition leader Maria Corina Machado was honored with the Nobel Peace Prize. In a surprising gesture, Machado dedicated her award to US President Donald Trump, who has previously expressed his belief that he deserved the prize himself.
The Nobel Prize in Economics includes a diploma, a gold medal, and a $1.2 million cash award. Laureates will formally receive their honors at ceremonies in Stockholm and Oslo on December 10, the anniversary of Alfred Nobel’s death in 1896.
What you should know
Joel Mokyr, Philippe Aghion, and Peter Howitt were jointly recognized for their research on how innovation drives long-term economic growth.
Their theories, particularly the concept of “creative destruction” continue to shape modern economic policy and understanding of how technology sustains prosperity.
