Context:
-
- The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (Nobel Prize in Economics) for 2025 was awarded to three economists: Joel Mokyr, Philippe Aghion, and Peter Howitt.
- They were jointly recognised “for having explained innovation-driven economic growth.” Their work provides a deeper understanding of the processes that drive long-term economic prosperity and improved living standards.
Key Highlights / Details:
-
- Philippe Aghion and Peter Howitt were honoured “for the theory of sustained growth through creative destruction.”
- They developed a mathematical model in 1992 for the concept of Creative Destruction, originally popularised by economist Joseph Schumpeter.
- Creative Destruction is the process by which new innovations, products, and firms replace older, outdated ones in a continuous cycle, which is essential for capitalist dynamism and long-term economic growth.
- Joel Mokyr was honoured “for having identified the prerequisites for sustained growth through technological progress.”
- An economic historian, Mokyr’s research showed that sustained technological progress requires an institutional and cultural environment that is open to new ideas, values knowledge and experimentation, and understands the scientific explanation of how things work, not just how to make them work.
- Philippe Aghion and Peter Howitt were honoured “for the theory of sustained growth through creative destruction.”