The Royal Swedish Academy of Sciences announced on Monday that Joel Mokyr, Philipp Aghion and Peter Howitt have won the 2025 Nobel Prize in Economics for their research on how the power of innovation and "creative destruction" drives sustained economic growth.


The 79-year-old Mokier, who is currently a professor at Northwestern University in the United States, will exclusively receive half of the 11 million Swedish krona bonus. Agion, 69, holds teaching positions at the Collège de France, INSEAD in Paris and the London School of Economics in the UK. Howitt, 79, works at Brown University in the United States.

How can the economy continue to grow?

The Nobel Prize official wrote in the award citation: "The 2025 economics laureates have revealed to us that continued economic growth is not a given. In the long history of mankind, economic stagnation rather than growth has been the norm. Their research shows that we must be vigilant and resist factors that threaten continued growth... If we cannot deal with these threats, the 'creative destruction' mechanism that has brought us sustained growth may come to a halt - and then we will have to readjust to economic stagnation."

Economic historian Mokyr was awarded the prize for his research on how innovation promoted sustained economic growth during the Industrial Revolution and subsequent periods, making the Nobel Economics Prize for the fourth consecutive year with a significant element of economic history.

Mokyr pointed out that a continuous flow of "useful knowledge" is necessary to promote continuous economic growth. If innovation is to continue to occur in a self-generating way, people must not only know that something works, but also understand why it works. This is why new discoveries made before the Industrial Revolution were difficult to develop further.


Focusing on the impact of technological change, Mokyr pointed out that three prerequisites need to be met to achieve sustained growth: first, the co-evolution of science and technology - people must understand why things work; second, the popularization and improvement of mechanical skills; third, society must remain open to potentially disruptive changes.

In a subsequent paper published in 1992, Aghion and Howitt constructed a mathematical model of so-called "creative destruction": when newer and better products enter the market, companies selling old products suffer losses. This innovation represents the birth of something new and is therefore creative. But it can also be disruptive because companies with outdated technology will be driven out of the market.


This model has direct guiding significance for economic policy formulation and can be used to calibrate R&D subsidy policies and optimize the social security system for unemployed workers during technological changes.

Agion and Howitt also co-authored the book "Endogenous Growth Theory."


Regarding the significance of these award-winning studies, Dr. Liu Hongjie, digital economy research consultant at Stanford University's Human-Centered Artificial Intelligence (HAI) Institute, commented: "The research of these winners reveals that innovation has become an endogenous force for growth - economic growth is no longer regarded as an exogenous miracle, but a systematic result of institutions, competition and knowledge accumulation. At the same time, institutions determine the innovation ecology, and competition, education, scientific research investment and property rights protection jointly shape the sustainability of innovation. From the industrial revolution to the AI ​​era, the key to technological change is to 'let innovation reproduce itself'."

New Nobel laureate criticizes Trump tariffs

As the only scholar based in Europe among the three laureates, Aghion was also asked at Monday's press conference about the threat of U.S. tariff policies to economic growth.

He bluntly stated that he "does not like the wave of protectionism in the United States, which is not conducive to world economic growth and innovation." At the same time, he also emphasized at the press conference that "openness is the driving force of growth. Any factors that hinder openness will become a stumbling block to growth. Therefore, I see the dark clouds currently gathering, which are promoting trade barriers and closed policies."

He also stressed the need to strike a balance between economic growth and environmental protection and promote competition in the field of artificial intelligence. He warned that in the absence of careful regulation, "superstar" companies could monopolize the field and prevent future competitors from entering.