Three academics from both sides of the Atlantic will share the 2025 Nobel Prize for economics for their work on the role of innovation in generating economic expansion.
Joel Mokyr of Northwestern University, Philippe Aghion of the London School of Economics and INSEAD in Paris, and Peter Howitt at Brown University were named as this year’s recipients in a presentation in Stockholm on Monday that covered their collective efforts in identifying what drives growth, and how creative destruction helps with that.
“The laureates’ work reminds us that we should not take progress for granted,” Kerstin Enflo, professor of economic theory at Lund University and member of the prize committee, told reporters. “Society must keep an eye on the factors that generate and sustain economic growth. These are science-based innovation, creative destruction, and society open for change.”
Mokyr, a Dutch-born economic historian, was lauded for his work on how sustained economic growth took hold with the industrial revolution and its aftermath, fueled by innovation. His two colleagues then unveiled a model in 1992 to show how that process effectively amounts to creative destruction.
“I’m still speechless,” Aghion told the press conference by phone in an initial reaction after being told of his award. Mokyr will take one half of the 11 million-krona ($1.2 million) award, while Aghion and Howitt will share the remainder.
Paris-born Aghion is the only one of the three based in Europe. He previously pressed President Emmanuel Macron to raise France’s pension age from 62 to 64 — a centrepiece reform that the Socialist Party is currently trying to undo in return for its support to pass a budget. Asked by a journalist on what threat US tariffs pose to growth, he was critical.
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“I’m not welcoming the protectionist wave in the US,” he said. “That’s not good for us, for growth and innovation. European countries have to realise that we should no longer let the US and China become technological leaders and lose to that.”
He also highlighted how Europe’s economy has declined relative to the US, because “we failed to implement breakthrough high-tech innovations.”
Agion was also questioned on the promise of artificial intelligence, and gave a cautious welcome.
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“Ideas will become easier to find more than ever thanks to AI, so AI has a big growth potential,” he said. “The problem is to harness that potential, and that’s where competition policy is important.”
Howitt, who is Canadian born, has collaborated frequently with Aghion on so-called Schumpeterian Growth Theory, named after the Austrian intellectual who first coined the term creative destruction.
The award, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968 by the Swedish central bank. It complements annual prizes for achievements in physics, chemistry, medicine, literature and peace, which were established in the will of Alfred Nobel — the Swedish inventor of dynamite who died in 1896.
Last year, three US-based academics shared the prize for their research into the impact of Europe’s former empires on growth. Other famous laureates include former Federal Reserve Chairman Ben Bernanke, who shared the award in 2022 with Douglas Diamond and Philip Dybvig for research on banks and financial crises. A year later Claudia Goldin received the accolade for her research into gender gaps in pay.
Despite Goldin’s recent win, the Nobel Prizes are famously unequal, reflecting how women have been overshadowed by men in science for centuries. Only three women have received the economics award, which makes its roster of laureates the second most male-dominated, after the prize in physics.
