Three economists receive Nobel for unravelling mechanics of innovation

Joel Mokyr, Philippe Aghion, and Peter Howitt were awarded the Nobel Memorial Prize in Economic Sciences on October 13 for their pioneering research on the role of innovation in driving economic growth and the process by which new technologies replace older ones—a concept known as “creative destruction.”

According to US media, the three laureates bring different yet complementary perspectives to economics. Mokyr, an economic historian, examines long-term trends using historical sources, while Aghion and Howitt employ mathematical models to explain how creative destruction operates in modern economies.

Mokyr, 79, who hails from the Netherlands and teaches at Northwestern University, was caught off guard by the news. “People always say this, but in my case, it’s true—I had no clue anything like this was going to happen,” he told reporters while still trying to get his morning coffee. He recalled telling his students that he was “more likely to be elected Pope than to win the Nobel Prize in economics—and I am Jewish, by the way.” Mokyr, who will turn 80 next summer, said he has no plans to retire. “This is the type of job I dreamed about my entire life,” he said.

Aghion, 69, affiliated with the Collège de France and the London School of Economics, also expressed surprise. “I can’t find the words to express what I feel,” he said during a press conference in Stockholm. He added that he plans to reinvest his prize money into his research laboratory. On current global trade tensions and protectionist policies, Aghion commented: “I am not welcoming the protectionist way in the US. That is not good for world growth and innovation.”

Canadian-born Howitt, 79, teaches at Brown University and, together with Aghion, has developed mathematical frameworks to analyse the mechanisms of sustained economic growth. Their joint work includes a landmark 1992 article establishing a model of creative destruction.

The laureates were recognised for clarifying and quantifying creative destruction—a process in which beneficial innovations replace older technologies and businesses. The concept was originally outlined by economist Joseph Schumpeter in his 1942 book, Capitalism, Socialism and Democracy.

The Nobel Committee highlighted Mokyr’s contribution, noting that he “demonstrated that for innovations to succeed in a self-generating process, it is not enough to know that something works; scientific explanations for why it works are also required.” Meanwhile, Aghion and Howitt illuminated the underlying mechanisms of sustained economic growth.

Aghion has also played a prominent role in policy, helping shape French President Emmanuel Macron’s economic program during the 2017 campaign and co-chairing the 2024 Artificial Intelligence Commission, which produced 25 recommendations to position France as a leader in AI.

John Hassler, chair of the prize committee, said: “The laureates’ work shows that economic growth cannot be taken for granted. We must preserve the mechanisms that underpin creative destruction, so that we do not fall back into stagnation.”

The total prize of 11 million Swedish kronor (approximately $1.2 million) will be split, with Mokyr receiving one-half and Aghion and Howitt sharing the other. Winners also receive an 18-carat gold medal and a diploma.

Formally, the award is called the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. Established by Sweden’s central bank in 1968, it commemorates Nobel, the 19th-century inventor of dynamite and founder of the five original Nobel Prizes. Since its inception, the prize has been awarded 57 times to 99 laureates, only three of whom have been women.

While purists note that the economics prize is technically not one of the original Nobel Prizes, it is presented alongside them every year on December 10, the anniversary of Alfred Nobel’s death in 1896.

This year’s Nobel announcements followed those in medicine, physics, chemistry, literature, and peace.

By Tamilla Hasanova