Joel Mokyr, Philippe Aghion and Peter Howitt win Nobel Prize for Economics

Their work, the Academy noted, has deepened understanding of how technological change, knowledge creation, and the constant cycle of innovation and obsolescence drive prosperity. Together, Mokyr, Aghion, and Howitt have provided a framework that links economic history with modern growth theory explaining not just why economies grow, but how they sustain that growth over centuries.

BREAKING NEWS
The Royal Swedish Academy of Sciences has decided to award the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Joel Mokyr, Philippe Aghion and Peter Howitt “for having explained innovation-driven economic growth” with one half to Mokyr… pic.twitter.com/ZRKq0Nz4g7

— The Nobel Prize (@NobelPrize) October 13, 2025

Mokyr found the causes behind sustained growth becoming the new normal. Citing historical sources, he emphasised how important it is for society to be open to new ideas and changes to sustain growth. He noted that the Industrial-Revolution-driven growth came to a halt owing to the lack of scientific explanations for why innovations work.

“He demonstrated that if innovations are to succeed one another in a self-generating process, we not only need to know that something works, but we also need to have scientific explanations for why. The latter was often lacking prior to the industrial revolution, which made it difficult to build upon new discoveries and inventions,” the committee noted.

Aghion and Howitt, in a article in 1992 unfurled a mathematical model for “creative destruction,” the phenomenon where “new and better products” enter the market, leading to companies selling older products and losing out.

The two illustrated how creative destruction creates conflicts that must be managed in a constructive manner, otherwise established companies and interest groups could comprise the process.

“The laureates’ work shows that economic growth cannot be taken for granted. We must uphold the mechanisms that underly creative destruction, so that we do not fall back into stagnation,” says John Hassler, chair of the committee for the Nobel Prize in Economics said.

The Economic Sciences Prize, established in 1968 by Sweden’s central bank, is the last of the Nobel awards to be announced each year.