2025 Nobel Prize in Economics Awarded for Pioneering Theories on Innovation and Creative Destruction

The 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their groundbreaking research on innovation-driven economic growth and the concept of creative destruction. This prestigious award recognizes their development of analytical models explaining how repeated technological innovations sustain long-term economic growth and contribute to societal advancement.

Joel Mokyr, a Dutch economist based at Northwestern University, was honored for identifying the conditions necessary for sustained growth through technological development. His work emphasizes the crucial role of understanding inventions to enable continuous progress. Philippe Aghion, affiliated with Collège de France and INSEAD Paris, and Peter Howitt from Brown University, were recognized for their theory of sustained growth through creative destruction—a process where new technologies render old ones obsolete, fostering economic development.

John Hassler, chair of the Nobel Prize committee, highlighted the necessity of nurturing the mechanisms behind creative destruction to prevent economic stagnation. Micael Dahlen of the Stockholm School of Economics noted that the laureates' research demonstrates the significant long-term impact of technology on growth, even when its immediate effects appear uncertain. Erik Öberg from Uppsala University praised the winners for their transformative influence on growth and development research, while public debater Johan Norberg commended Mokyr as one of the greatest economists and historians, praising his insights into the dynamic interplay between hard and soft innovations.

This year’s prize, which includes a monetary award of 11 million kronor, reflects a focus on macroeconomic research and underscores the importance of innovation as a driver of prosperity. The Riksbank Prize, established in 1968, commemorates Alfred Nobel and celebrates economists whose work advances understanding of economic dynamics. The laureates’ contributions elucidate the disruptive yet essential role of new ideas in shaping economies and societies worldwide.