3 Economists Win Nobel Prize for “Innovation-Driven Growth” and “Creative Destruction” Theories

Darwin, 14 October- 

Three distinguished economists — Joel Mokyr, Philippe Aghion, and Peter Howitt — have been awarded the 2025 Nobel Prize in Economics for their groundbreaking work on innovation-driven economic growth and the theory of creative destruction.

The announcement was made by the Royal Swedish Academy of Sciences at 3:45 p.m. (local time) on Monday.

According to the Nobel Committee, the trio received the award “for explaining innovation-based economic growth and identifying the conditions under which technological progress can lead to sustainable development.”

Half of the prize goes to Joel Mokyr, while the remaining half will be shared jointly by Philippe Aghion and Peter Howitt for developing the theory of creative destruction, which redefined the concept of sustainable economic growth.

In its statement, the Nobel Committee said the laureates have taught the world that economic growth is never guaranteed:

> “Throughout most of human history, stagnation was the norm rather than growth. Their research shows that sustaining growth requires constant innovation and vigilance against potential threats.”

Using extensive historical data and documentation, Mokyr demonstrated how technological progress and innovation transformed economic growth into a regular phenomenon. Meanwhile, Aghion and Howitt analyzed the underlying mechanisms of that growth.

In their seminal 1992 paper, Aghion and Howitt presented a mathematical model explaining that when new and improved products enter the market, older ones become obsolete — a process known as creative destruction, where innovation arises from within the existing system.

The Nobel press release noted that sustained economic growth, first observed over the past two centuries, has lifted billions of people out of poverty and laid the foundation for modern prosperity.

About the Laureates:

Joel Mokyr was born in 1946 in the Netherlands and earned his Ph.D. from Yale University in 1974. He is currently a professor at Northwestern University, USA.

Philippe Aghion was born in 1956 in Paris, France, and received his Ph.D. from Harvard University in 1987. He currently serves as a professor at the London School of Economics.

Peter Howitt, born in 1946 in Canada, obtained his Ph.D. from Northwestern University in 1973 and later joined Brown University as a professor.

Although commonly referred to as the “Nobel Prize in Economics,” this award is not one of Alfred Nobel’s original prizes. It was established in 1969 by the Swedish Central Bank in memory of Alfred Nobel. Since then, a total of 57 economists have received the honor.

The 2025 prize carries a monetary award of 11 million Swedish kronor. Half will go to Mokyr, while Aghion and Howitt will share the remaining amount.