Winners of the 2025 Nobel prize in economics announced

The 2025 Nobel Prize in Economic Sciences has been awarded to scholars who explained how innovation and technological progress help societies prosper.

Half of the prize went to Joel Mokyr of Northwestern University in the United States. The other half was shared by Philippe Aghion of the Collège de France and Peter Howitt of the London School of Economics.

“The laureates Joel Mokyr, Philippe Aghion and Peter Howitt have shown how innovation serves as a driving force for continued progress,” the Nobel Committee said in its announcement.

According to the statement published on the Nobel Committee’s website, Joel Mokyr used historical evidence to demonstrate the nature of sustained economic growth. As his research shows, for innovation to follow one breakthrough after another, it is necessary “not only to know that something works, but also to have a scientific explanation of why it works.” “The latter was often missing before the Industrial Revolution, which hindered new discoveries and inventions. Mokyr also emphasized the importance of a society’s openness to new ideas and its willingness to change,” the Committee noted.

Philippe Aghion and Peter Howitt, who also studied the mechanisms of sustained growth, developed in their 1992 paper a mathematical model of so-called creative destruction. The essence of the model is that when a new and improved product enters the market, companies selling outdated ones suffer losses. “Innovation is something new, and therefore creative. But it is also destructive, as firms whose technologies become obsolete are driven out of the market,” explained the Royal Swedish Academy of Sciences. This process of “creative destruction,” the Academy adds, also generates conflicts: established companies may seek to block innovation to protect their market positions.

“The work of this year’s laureates shows that economic growth cannot be taken for granted. We must sustain the mechanisms that underpin creative destruction – otherwise we risk falling into stagnation,” said John Hassler, chair of the Committee for the Prize in Economic Sciences.