Three win Nobel in Economics for research on creative destruction
Joel Mokyr, Philippe Aghion, and Peter Howitt won the Nobel Memorial Prize in Economics for their work on “creative destruction,” explaining how innovations replace outdated technologies. Their research combines historical analysis and mathematical models to quantify the mechanisms driving economic growth
Stockholm: Joel Mokyr, Philippe Aghion and Peter Howitt won the Nobel Memorial Prize in Economics Monday for their research into the impact of innovation on economic growth and how new technologies replace older ones, a key economic concept known as “creative destruction”. The winners represent contrasting but complementary approaches to economics.
Mokyr is an economic historian who delved into long-term trends using historical sources, while Howitt and Aghion relied on mathematics to explain how creative destruction works.
Dutch-born Mokyr, 79, is from Northwestern University; Aghion, 69, from the Collège de France and the London School of Economics; and Canadian-born Howitt, 79, from Brown University.
Mokyr was still trying to get his morning coffee when he was reached on the phone by an AP reporter, and said he was shocked to win the prize.
“People always say this, but in this case I am being truthful — I had no clue that anything like this was going to happen,” he said.
His students had asked him about the possibility that he would win the Nobel, he said. “I told them that I was more likely to be elected Pope than to win the Noel Prize in economics — and I am Jewish by the way.” Mokyr will turn 80 next summer but said he has no plans to retire. “This is the type of job that I dreamed about my entire life,” he said.
Aghion said he was shocked by the honour. “I can’t find the words to express what I feel,” he said by phone to the press conference in Stockholm. He said he would invest his prize money in his research laboratory.
Asked about current trade wars and protectionism in the world, Aghion said that: “I am not welcoming the protectionist way in the US. That is not good for … world growth and innovation.” The winners were credited with better explaining and quantifying “creative destruction,” a key concept in economics that refers to the process in which beneficial new innovations replace — and thus destroy — older technologies and businesses. The concept is usually associated with economist Joseph Schumpeter, who outlined it in his 1942 book “Capitalism, Socialism and Democracy.” The Nobel committee said Mokyr “demonstrated that if innovations are to succeed one another in a self-generating process, we not only need to know that something works, but we also need to have scientific explanations for why.” Aghion and Howitt studied the mechanisms behind sustained growth, including in a 1992 article in which they constructed a mathematical model for creative destruction.
Aghion helped shape French President Emmanuel Macron’s economic program during his 2017 election campaign. More recently, Aghion co-chaired the Artificial Intelligence Commission, which in 2024 submitted a report to Macron outlining 25 recommendations to position France as a leading force in the field of AI.
“The laureates’ work shows that economic growth cannot be taken for granted. We must uphold the mechanisms that underlie creative destruction, so that we do not fall back into stagnation,” said John Hassler, chair of the committee for the prize in economic sciences.
One-half of the 11 million Swedish kronor (nearly USD 1.2 million) prize goes to Mokyr, and the other half is shared by Aghion and Howitt. Winners also receive an 18-carat gold medal and a diploma.
The economics prize is formally known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. The central bank established it in 1968 as a memorial to Nobel, the 19th-century Swedish businessman and chemist who invented dynamite and established the five Nobel Prizes.
Since then, it has been awarded 57 times to a total of 99 laureates. Only three of the winners have been women.
Nobel purists stress that the economics prize is technically not a Nobel Prize, but it is always presented together with the others on Dec. 10, the anniversary of Nobel’s death in 1896.
Nobel honours were announced last week in medicine, physics, chemistry, literature and peace.
