TLDR: The 2025 Nobel Memorial Prize in Economic Sciences has been awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their foundational work on innovation and ‘creative destruction’ as drivers of sustained economic growth. This announcement followed widespread speculation that the prize might recognize research in artificial intelligence or economic inequality, with prominent economists like Erik Brynjolfsson and Thomas Piketty being considered.
STOCKHOLM, October 13, 2025 – The Royal Swedish Academy of Sciences today announced Joel Mokyr, Philippe Aghion, and Peter Howitt as the recipients of the 2025 Nobel Memorial Prize in Economic Sciences. The trio was honored for their groundbreaking contributions to understanding how innovation and the forces of ‘creative destruction‘ propel sustained economic growth. The prestigious award, which concludes the 2025 Nobel season, carries a monetary reward of 11 million Swedish crowns (approximately $1.2 million), with half going to Mokyr and the other half jointly to Aghion and Howitt.
The announcement comes after considerable speculation within academic circles and among prize watchers, who had widely predicted that the award could recognize significant research in either artificial intelligence (AI) or economic inequality. Experts such as Micael Dahlen, a professor at the Stockholm School of Economics, had highlighted ‘information economics‘ as a strong contender, noting its increasing topical relevance, particularly with advancements in AI. American economist Erik Brynjolfsson was frequently cited as a strong candidate in this field. Similarly, American economist Susan Athey was mentioned by Uppsala University professor Mikael Carlsson for her work on how new technologies transform markets and public policies.
On the front of economic inequality, French-American Emmanuel Saez, France’s Thomas Piketty, and French economist Gabriel Zucman were among the names frequently floated. Researchers at the University of Gothenburg had indicated that wealth inequality research could feature prominently in this year’s edition.
However, the Academy ultimately recognized Mokyr, Aghion, and Howitt for their profound insights. Joel Mokyr, a professor at Northwestern University, was lauded for his historical perspective on technological progress and economic prosperity. Notably, Mokyr’s work acknowledges that emerging technologies like artificial intelligence could significantly accelerate the accumulation of useful knowledge, thereby reinforcing innovation cycles. Philippe Aghion, holding professorships at the Collège de France, INSEAD in Paris, and the London School of Economics, and Peter Howitt, a professor at Brown University, were recognized for developing the first macroeconomic model that describes ‘creative destruction‘ within a general equilibrium framework. Their seminal 1992 paper mathematically formalized how companies innovate to gain temporary monopolies, only to be subsequently displaced by newer innovations. This dynamic cycle of competition and replacement is crucial for driving sustained economic growth. Their model also delves into how incentives for research and development (R&D) arise from this process and how market forces influence the pace of innovation.
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The economics prize, uniquely, was not part of Alfred Nobel’s original 1896 will but was established by the Swedish central bank in 1968. The selection process mirrors that of the chemistry and physics prizes, handled by the Royal Swedish Academy of Sciences. This year’s choice underscores the enduring importance of innovation and dynamic competition in economic development, a theme with broad implications for global economies grappling with challenges such as slowing growth, technological disruption, and social inequality.
