The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2025
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INTERPERSONAL : SCIENCES
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SOCIOLOGY : POLITICAL
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'This year’s prize relates to the explanations for sustained growth based on technological innovation. Economic historian Joel Mokyr is rewarded with one half of the prize for his description of the mechanisms that enable scientific breakthroughs and practical applications to enhance each other and create a self-generating process, leading to sustained economic growth. Because this is a process that challenges prevailing interests, he also demonstrates the importance of a society that is open to new ideas and permits change.' 'The other half of the prize is awarded to the economists Philippe Aghion and Peter Howitt. In a joint publication from 1992, they constructed a mathematical model of how companies invest in improved production processes and new, better-quality products, while the companies that previously had the best products are outcompeted. Growth arises through creative destruction. This process is creative because it builds upon innovation, but it is also destructive because older products become obsolete and lose their commercial value.' | |
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'It is apparent that, in the long run, sustained growth does not only have positive consequences for human wellbeing. First, sustained growth is not synonymous with sustainable growth. Innovations can have significant negative side effects. Mokyr argues that such negative effects sometimes initiate processes that uncover solutions to problems, making technological development a self-correcting process. Clearly, however, this often requires well-designed policies, such as in the areas of climate change, pollution, antibiotic resistance, increasing inequality and the unsustainable use of natural resources.' |
orcid.org/0000-0002-0192-8965
