Context:
• The 2025 Nobel Prize in Economics revives global attention on the economics of innovation and growth, with insights from laureates Joel Mokyr, Philippe Aghion, and Peter Howitt.
• Joel Mokyr’s playful yet pointed remark highlights how economic history remains undervalued, despite being essential for understanding modern anxieties—AI, inequality, and rising debt.
Key Highlights:
- Importance of Innovation Economics
- The 2025 Nobel Prize underscores the centrality of innovation-driven growth in shaping modern economies.
- Laureate Joel Mokyr stressed that economic history is often underrated within the discipline.
- Contributions of the Laureates
- Work by Mokyr, Aghion, and Howitt emphasizes how social technology, institutions, and entrepreneurship drive long-term growth.
- Their research provides frameworks to analyse contemporary challenges like AI disruption, public debt pressures, and growing inequality.
Significance
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Mokyr’s scholarship highlights that modern economic growth is fundamentally a social technology—a system relying on institutions, civic norms, and channels that spread useful knowledge across society.
• The Aghion–Howitt Schumpeterian Growth Model complements this view by explaining how creative destruction, innovation, and policy interventions that promote competition sustain long-run growth.
• Economic history becomes indispensable when analysing AI’s impact on employment, fiscal sustainability, or structural inequality, as it helps identify patterns, adaptations, and institutional responses that shaped past transitions.
• Tackling current global anxieties requires:
- Strengthening institutional capacity
- Ensuring portable benefits and social protection for workers
- Adopting pro-competitive policies to lower entry barriers
- Enhancing knowledge diffusion to democratize innovation
• History repeatedly shows that prosperity is not automatic—societies must constantly safeguard openness, experimentation, and critical inquiry, the foundations of continuous innovation.