Economists Honored for Insights on Innovation and Economic Growth

The Royal Swedish Academy of Sciences announced the winners of the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel on Monday. Recognized for their groundbreaking work on innovation-driven growth, the laureates include American-Israeli economic historian Joel Mokyr, French economist Philippe Aghion, and Canadian economist Peter Howitt.

Their research has significantly reshaped how we understand long-term economic development, illustrating that technological advancements and creative processes are central to fostering prosperity. Aghion and Howitt built upon Joseph Schumpeter’s concept of "creative destruction," showing how continuous innovation not only disrupts existing industries but also enhances productivity and standard of living. An example is the shift to digital platforms, which has transformed media consumption and boosted economic output.

Joel Mokyr's studies delve into Europe’s evolution post-Renaissance, identifying how a "culture of growth" propelled significant economic changes. He highlights the role of intellectual curiosity and scientific dialogue in fueling the Industrial Revolution, which laid the groundwork for modern technological advancements.

This trio's contributions underscore that sustainable growth is driven by more than just physical resources. They argue that institutions, incentives, and cultural mindsets play crucial roles in fostering innovation and reinvention. Their insights offer vital guidance for policymakers aiming to achieve a balance between economic stability and progressive development.