This year’s Nobel Prize in Economics has been awarded to three economists. According to the Royal Swedish Academy of Sciences, Joel Mokyr, Philippe Aghion, and Peter Howitt won the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel “for having explained innovation-driven economic growth.”
Half of the prize goes to Mokyr from Northwestern University for figuring out what makes technical advancement last. His work uses historical data to show how important it is to understand science—knowing why an invention works, not just that it does—and to live in cultures that are open to new ideas and willing to adapt.
The other half is given to Aghion (Collège de France, INSEAD, and the London School of Economics) and Howitt (Brown University) for making the idea of “creative destruction” more formal. In their 1992 model, new and better technologies come into the market and beat out existing ones. This process enhances living standards over time, but it might hurt people who are already in the market.
The Academy said that creative destruction also leads to conflicts that need to be handled so that established companies and interest groups don’t stop new ideas from being developed. The committee stressed that we can’t expect that growth will continue and that we need to keep the pathways for innovation open.
John Hassler, the chair of the prize committee, said, “We must keep the mechanisms that make creative destruction work so that we don’t go back to being stuck.”
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