Nobel Economics Prize 2025: Mokyr, Aghion and Howitt awarded for work on innovation-led growth

Economists Joel Mokyr, Philippe Aghion, and Peter Howitt have won the 2025 Nobel Prize in Economic Sciences for their pioneering work explaining how innovation and technological progress drive long-term economic growth through the process of creative destruction, the Royal Swedish Academy of Sciences said on Monday.The trio were recognised for developing theories that link historical shifts in technology, institutions, and knowledge to modern patterns of productivity and prosperity.

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 (@nobelprze) October 13, 2025

Their research has reshaped how economists understand the mechanics of growth – from the Industrial Revolution’s leap in living standards to the digital and AI-driven economies of today.
Aghion and Howitt’s seminal 1992 paper on “creative destruction” built on Joseph Schumpeter’s ideas, formalising how new innovations replace outdated industries, propelling economies forward while disrupting established firms.Mokyr’s historical studies provided empirical depth, showing how Europe’s Enlightenment ideals, openness to ideas, and the rise of scientific inquiry sparked the Industrial Revolution and broke centuries of stagnation visible in GDP trends.

The Nobel Committee illustrated this transformation using economic growth charts – depicting how human prosperity remained largely flat for millennia, interrupted by rare breakthroughs like the printing press, before soaring exponentially after the 18th century due to sustained innovation.

Together, the laureates’ work underscores that progress is not inevitable. They warn that innovation can stall when markets become monopolistic, academic and scientific freedoms are restricted, or knowledge sharing is hindered.

Their findings stress the need for policies that nurture competition, education, and openness to ideas – vital ingredients for keeping the “machine of innovation” running.

This year’s prize, officially titled the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, concludes the 2025 Nobel season and carries a reward of 11 million Swedish crowns ($1.2 million).