Briefs · Frontier Science
Growth is not luck, but rather learning
The 2025 economics Nobel is not about money, but rather about why some centuries get richer and others do not.
On 13 October, the Royal Swedish Academy of Sciences awarded the Sveriges Riksbank Prize in Economic Sciences to Joel Mokyr, Philippe Aghion and Peter Howitt, “for having explained innovation-driven economic growth”. Mokyr takes half the 11 million kronor; Aghion and Howitt share the other half.
Mokyr, an economic historian at Northwestern, showed why sustained growth became possible at all. It is not enough to know that something works; for innovations to succeed one another in a self-generating process, we need scientific explanations for why it works — useful knowledge, mechanical competence and supportive institutions.
Aghion and Howitt built the engine. Their Schumpeterian growth theory, formalised in a 1992 paper, models creative destruction: a new and better product enters the market, the companies selling the older products lose out, and productivity rises as the old is replaced by the new.
Conclusion: growth is not an accident, but rather an achievement — creative destruction, clearly explained, and finally crowned.
Read the original at The Hindu BusinessLine
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