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The Royal Swedish Academy of Sciences announced that the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their groundbreaking work on innovation-driven economic growth. The prize recognises Mokyr for identifying the prerequisites for sustained growth through technological progress, while Aghion and Howitt are honoured jointly for developing the theory of sustained growth through creative destruction.

Joel Mokyr: Uncovering Roots of Innovation

The Nobel Committee highlighted Mokyr’s use of historical sources to examine the causes of sustained growth and how it became the norm. Mokyr demonstrated that for innovations to build on each other in a self-generating process, society must not only know that a new method works but also understand why it works.

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Mokyr also emphasised the importance of a society’s openness to new ideas and its ability to embrace change, showing that cultural and institutional factors are critical in fostering long-term economic development. Born in 1946 in Leiden, Netherlands, Mokyr earned his PhD from Yale University in 1974 and is currently a professor at Northwestern University, Illinois.

Aghion & Howitt: The Mechanics Of Creative Destruction

Philippe Aghion and Peter Howitt examined the mechanisms for long-run economic growth and how innovation transforms markets. In a seminal 1992 paper, they developed a mathematisation of creative destruction, in which the entry of a better product shatters current markets. The process is "creative" in that it brings in new products and technologies, but also "destructive" in that firms using older technologies are displaced.

This model has come to lie at the heart of explaining how innovation spurs long-run economic progress. Philippe Aghion was born in Paris in 1956, took his PhD from Harvard University in 1987, and teaches at Collège de France, INSEAD, and the London School of Economics. Peter Howitt, who was born in 1946 in Canada, has a PhD from Northwestern University, which he received in 1973, and is a professor at Brown University.

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Prize And Recognition

The 2025 Nobel Prize in Economics has a total value of 11 million Swedish kronor (USD 1,151,000). Half has been awarded to Joel Mokyr, and the remaining amount will be divided among Philippe Aghion and Peter Howitt.