Joel Mokyr, Philippe Aghion and Peter Howitt received the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for research explaining innovation-driven economic growth. The Royal Swedish Academy of Sciences awarded half the prize to Mokyr and divided the other half jointly between Aghion and Howitt.
Mokyr was recognized for identifying conditions that allow technological progress to generate sustained growth. Drawing on historical evidence, his work distinguished between practical knowledge that a technique works and scientific understanding of why it works. The academy said that deeper explanatory knowledge helps later innovators build on discoveries, while social openness to new ideas and change allows the process to continue.
Aghion and Howitt were honored for a theory of growth based on creative destruction. Their 1992 mathematical model described a recurring process in which a better product or production method enters the market and displaces an older one. Innovation is creative because it introduces improvement, but destructive because firms tied to the superseded technology lose business or disappear.
Together, the research programs address a historical question: why sustained economic growth became normal only in the past two centuries, after long periods in which advances tended eventually to level off. The academy said innovation can create a continuing cycle of new knowledge, products and methods that improves living standards, health and quality of life. It also emphasized that this outcome is not automatic.
Creative destruction generates winners and losers, and established companies or interest groups may resist changes that threaten them. The laureates' work therefore points to the need for institutions capable of managing those conflicts without blocking further innovation. John Hassler, chair of the prize committee, said the mechanisms supporting creative destruction must be maintained if economies are to avoid stagnation.
Mokyr was affiliated with Northwestern University and the Eitan Berglas School of Economics at Tel Aviv University. Aghion's affiliations included Collège de France, INSEAD and the London School of Economics and Political Science. Howitt was a professor at Brown University.
The total prize was 11 million Swedish kronor. Mokyr's half recognized his historical account of the prerequisites for self-sustaining technological progress; the remaining half recognized Aghion and Howitt's formal theory of how successive innovations reshape markets. CNN separately reported the award and summarized the common theme as the relationship between innovation, replacement of older technologies and long-run economic growth.
