Published: 11 October 2025NobelPrize.orgEconomy
Nobel Prize in Economics 2025: Mokyr, Aghion and Howitt for Innovation-Driven Growth Theory
The 2025 Sveriges Riksbank Prize in Economic Sciences was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for explaining how innovation drives economic growth. Mokyr received half the prize for identifying prerequisites for sustained growth through technological progress, while Aghion and Howitt shared the other half for developing the theory of sustained growth through creative destruction.
Mokyr's work emphasises cultural and institutional factors enabling the Industrial Revolution and subsequent economic growth. Aghion and Howitt built on Joseph Schumpeter's concept of creative destruction, demonstrating how new innovations replace old technologies, driving productivity and growth. The prize was announced on October 13, 2025.
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The 2025 Nobel Prize in Economics was awarded for work related to:
Explanation · Correct answer BMokyr, Aghion and Howitt won the 2025 Nobel Economics Prize. Mokyr identified prerequisites for tech-driven growth; Aghion and Howitt developed the theory of sustained growth through creative destruction.
Frequently asked questions
Who won the Nobel Prize in Economics 2025 and for what contribution?
The **Nobel Prize in Economics 2025 was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt** for their contributions to the **Theory of Innovation-Driven Growth**. Their work demonstrated how **technological innovation, creative destruction, and knowledge diffusion** drive long-run economic growth and prosperity.
What is Aghion-Howitt innovation-driven growth theory in economics?
The **Aghion-Howitt model** (also known as the Schumpeterian growth model) proposes that **economic growth is driven by R&D investment and innovation that makes older technologies obsolete** — a process called 'creative destruction.' Their framework showed that **competition and market structure** play key roles in determining innovation incentives.
What is Joel Mokyr's contribution to economic history and Nobel Prize 2025?
**Joel Mokyr is an economic historian** whose work connects **technological knowledge, the Enlightenment, and the Industrial Revolution** to modern economic growth theory. His research showed that the **culture of improvement and scientific curiosity in 18th century Europe** laid the foundations for sustained economic development.
What is creative destruction in economics and how does it relate to Nobel 2025?
**Creative destruction** is a concept originally from Joseph Schumpeter describing how **new innovations destroy old industries and business models while creating new ones**. Aghion and Howitt's Nobel-winning work formalized this into **mathematical growth models** showing that innovation's disruption is the engine of long-run prosperity.
What are the policy implications of the 2025 Nobel Economics Prize on innovation-driven growth?
The 2025 Nobel Economics Prize work suggests that **governments should invest in basic research, protect intellectual property rights, and foster competitive markets** to drive innovation. For India, the framework implies that **R&D spending (currently ~0.6% of GDP) needs significant increase** to sustain high economic growth rates.
