The 2025 Nobel Prize in Economics was awarded to the theory of “creative destruction”

The Royal Swedish Academy of Sciences announced that this year's Nobel Prize in Economics has been shared between Joel Mokyr, Philippe Aghion and Peter Howitt for their pioneering research into how technological innovation drives long-term economic growth.

In a statement released today, it was announced that the award was given to Joel Mokyr from Northwestern University, Philippe Aghion from the Collège de France and the London School of Economics (LSE), and Peter Howitt from Brown University.

According to the academy, half of the prize was awarded to Mokyr for “identifying the preconditions for sustainable growth through technological progress” and the other half to Aghion and Howitt for their “theory of sustainable growth through creative destruction.”

The official name of the award is the “Swedish Central Bank Prize in Economic Sciences in Memory of Alfred Nobel” and its value is 11 million Swedish kronor (approximately 50 million Turkish Lira).

According to CNN, the academy emphasized that the awardees “contribute to a deeper understanding of how technological progress increases productivity, shapes markets, and transforms societies over time,” and that their work has profoundly influenced both economic theory and political decision-making.

MOKYR EXAMINES THE CULTURAL ORIGINS OF THE INDUSTRIAL REVOLUTION

Mokyr, a leading economic historian at Northwestern University, is known for his detailed examination of how ideas, institutions, and cultural factors enabled sustained growth during the Industrial Revolution.

His research examined how technological progress is embedded in modern economies, demonstrating that knowledge and innovation are the fundamental engines of prosperity.

Mokyr's research has also focused on the cultural and intellectual conditions that made the Industrial Revolution in Europe possible, demonstrating how scientific curiosity, technological creativity, and institutional openness interacted to create a self-perpetuating cycle of progress.

In his work that bridges history and economics, Mokyr offers important insights into why some societies are more innovative than others.

ARCHITECTS OF THE "CREATIVE DESTRUCTION" MODEL The other two award winners were Aghion and Howitt, who have been working together for a long time and developed the theoretical framework known today as the "Schumpeterian growth model," based on the process of "creative destruction." This model explains the process by which old technologies are constantly replaced by newer and more efficient ones. According to France24, the duo's 1992 model mathematically formulated this process, revealing how companies' incentives to innovate are shaped by competition, the political community, and institutional structures. The duo's approach was based on the work of Austrian economist Joseph Schumpeter, who placed the concept of "creative destruction" at the center of capitalist development. By formalizing this concept, Aghion and Howitt provided decision-makers with powerful tools to understand the effects of innovation policy, market regulations, and intellectual property rights on economic performance. Meanwhile, the academy stated that these findings have had a "profound impact" on contemporary economic policy. These studies have been It was stated that he has guided discussions in areas such as research and development (R&D) investments, competition policy, and climate innovations, and has also played a significant role in examining patterns of inequality and productivity in developed and developing countries. The Nobel Committee stated, “The laureates have taught us that sustainable growth does not emerge spontaneously. Economic stagnation has been more common than growth throughout most of human history. Their work shows that we must be vigilant against the threats to growth.”

NOBEL PRIZE WINNERS IN OTHER BRANCHES

HISTORY OF THE ECONOMY AWARD

The Nobel Prize in Economics, established in 1968 by the Swedish Central Bank in memory of Alfred Nobel, is not among the main awards included in Nobel's will.

The official Nobel Prize ceremony will take place in Stockholm on December 10. Laureates will receive their medals and diplomas from King Carl XVI Gustaf of Sweden.