2025 Nobel Economists: Mokyr, Aghion, and Howitt

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded to three distinguished researchers for their transformative work on innovation and economic growth. Joel Mokyr received half of the prize “for having identified the prerequisites for sustained growth through technological progress,” while Philippe Aghion and Peter Howitt jointly received the other half “for the theory of sustained growth through creative destruction.”

The winners were officially announced by the Royal Swedish Academy of Sciences on October 13, 2025, in Stockholm, Sweden.

Mokyr is based at Northwestern University, Aghion at the London School of Economics and INSEAD in Paris, and Howitt at Brown University.

What drives long-term economic growth? For generations, this question has been central to economics. While capital accumulation and labor productivity improvements clearly matter, they don't fully explain why some economies consistently innovate and prosper while others stagnate. The 2025 Nobel Laureates have provided crucial insights into how technological innovation—and the process by which new technologies replace old ones—serves as the fundamental engine of sustained economic expansion.

Their research explores the impact of innovation on economic growth and how new technologies replace older ones, a key economic concept known as “creative destruction.” This work has profound implications for understanding everything from industrial policy to the challenges societies face when adapting to rapid technological change.

The Laureates’ contributions represent two distinct but complementary approaches to understanding innovation-driven growth.

Joel Mokyr brings a historical lens to the question of innovation and growth. His work examines the deep historical prerequisites that enable sustained technological progress. By analyzing periods of dramatic technological advancement, from the Industrial Revolution to the modern era, Mokyr has identified the cultural, institutional, and intellectual conditions that allow innovation to flourish and drive long-term prosperity.

His research helps explain why certain societies at certain times become hotbeds of innovation while others, despite similar resources, fail to generate sustained technological progress. 

Aghion and Howitt studied the mechanisms behind sustained growth, including in a 1992 article in which they constructed a mathematical model for creative destruction. Their theoretical framework demonstrates how the endless process of innovation generates sustained economic growth.

Their model connects incentives for firms to invest in research and development, market competition, patent protection, and the timing of innovation. This work provides analytical tools for understanding how policy choices about intellectual property, competition, and research funding affect the pace and direction of technological change.

The Laureates’ research has direct implications for how governments and societies can both support innovation while managing its potentially disruptive effects. Their research can be used to address contemporary economic challenges and answer questions such as what role governments should play in funding research or how workers and communities most disrupted by technological change can be better supported.

Their research is also timely given current debates about technological advancement. As artificial intelligence, biotechnology, and clean energy technologies promise to reshape economies, the insights from Mokyr, Aghion, and Howitt can help us understand both the potential for growth and the challenges of managing such rapid change.

What makes this year's Laureates’ contributions particularly valuable is how they complement each other. Mokyr’s historical analysis reveals the deep conditions necessary for innovation to take root and flourish. Aghion and Howitt's theoretical models provide frameworks for understanding how innovation generates growth and how policy can influence this process. Together, their work has fundamentally shaped how economists understand the relationship between technological change and economic prosperity. They've shown that innovation isn't random but that it responds to incentives, institutions, and cultural conditions.