2025 Economic Sciences Prize Announced in Press Release
The Royal Swedish Academy of Sciences has announced the winners of the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. This prestigious award is shared by three prominent scholars: Joel Mokyr, Philippe Aghion, and Peter Howitt. Their groundbreaking work provides a profound understanding of innovation-driven economic growth.
Winners and Their Contributions
Joel Mokyr, affiliated with Northwestern University in Evanston, IL, USA, receives half of the prize. He is recognized for identifying the prerequisites necessary for sustained economic growth through technological advancement.
Philippe Aghion and Peter Howitt share the remaining half of the award. Aghion is associated with Collège de France and INSEAD in Paris, as well as The London School of Economics and Political Science in the UK. Howitt teaches at Brown University in Providence, RI, USA. Both scholars are acknowledged for formulating the theory of sustained growth through the concept of creative destruction.
The Role of Innovation in Economic Growth
The awarded research emphasizes how technological innovation fuels continuous economic growth. Over the past two centuries, the world has experienced unprecedented sustained economic growth, lifting millions out of poverty and establishing modern prosperity.
Historically, stagnation was common, despite occasional innovations. Mokyr’s research reveals that successful innovation requires not just understanding its functionality but also having scientific explanations for its mechanisms. This necessity often hindered progress prior to the Industrial Revolution.
In contrast, Aghion and Howitt developed a mathematical model in 1992 that illustrates creative destruction. This process occurs when new products surpass outdated ones, leading to the decline of companies reliant on outdated technologies. While innovation drives progress, it also poses challenges that demand effective management.
Future Implications
The work of the laureates underscores that economic growth is not guaranteed. John Hassler, chairman of the prize committee, highlights the importance of maintaining the mechanisms that support creative destruction to prevent regression into stagnation.
Prize Details and Background
The total prize amount for 2025 is 11 million Swedish kronor, with Mokyr awarded one half and Aghion and Howitt receiving the other half jointly. The extensive study of innovation and growth by these economists contributes significantly to our understanding of modern economics.
About the Laureates
- Joel Mokyr: Born 1946, Leiden, Netherlands; PhD from Yale University (1974).
- Philippe Aghion: Born 1956, Paris, France; PhD from Harvard University (1987).
- Peter Howitt: Born 1946, Canada; PhD from Northwestern University (1973).
The Royal Swedish Academy of Sciences, established in 1739, continues to promote scientific advancement and the influence of sciences within society. The Nobel Prize remains a hallmark of excellence in various fields, including economics.
