Nobel Committee Rewards Explorations of Why Growth Happens
There are years when the Royal Swedish Academy of Sciences’ selection for the Nobel Memorial Prize in Economic Sciences is good, years when it is bad, and years when it is outstanding. This year is outstanding. This is the prize I’ve been waiting for. Not because I predicted it or had money riding on it, but because it recognizes work that tackles THE question: Why did we get rich?
The 2025 Economics Nobel went to Joel Mokyr, Philippe Aghion, and Peter Howitt “for having explained innovation-driven economic growth.”
The biggest question in economics is the hockey stick. For most of human history, living standards barely budged. Then something shifted. We got the hockey stick. Why did this happen? When? What made it possible? Many economics papers are small. Many of my papers are small. But not this work.
This prize splits among two different contributions. Mokyr gets half for explaining the prerequisites—what conditions needed to exist before sustained growth could happen in the first place. Aghion and Howitt share the other half, for building the workhorse model of how innovation actually drives growth once those conditions are met. It’s history meets theory. Last year’s prize was history and theory but this is actually history. And that’s how economics should work.