Economists Win Nobel for Explaining Creative Destruction

Joel Mokyr, Philippe Aghion and Peter Howitt won the Nobel memorial prize in economics Monday for “having explained innovation-driven economic growth".

Mokyr is from Northwestern University, Aghion from the College de France and the London School of Economics, and Howitt from Brown University.

Aghion said he was shocked by the honour. “I can’t find the words to express what I feel," he said by phone to the press conference in Stockholm. He said he would invest his prize money in his research laboratory.

Asked about the current situation in the world, Aghion said that: “I am not welcoming the protectionist way in the US. That is not good for ... world growth and innovation.”

The Nobel committee said Mokyr “demonstrated that if innovations are to succeed one another in a self-generating process, we not only need to know that something works, but we also need to have scientific explanations for why".

The winners were credited with better explaining and quantifying “creative destruction", a key concept in economics that refers to the process in which beneficial new innovations replace – and thus destroy – older technologies and businesses. The concept is usually associated with economist Joseph Schumpeter, who outlined it in his 1942 book “Capitalism, Socialism and Democracy.”

Aghion and Howitt studied the mechanisms behind sustained growth, including in a 1992 article in which they constructed a mathematical model for creative destruction.

- France24