Trio win Nobel economics prize for work on technology-driven growth
Joel Mokyr has warned of ‘dark clouds’ amid Trump tariffs, while Philippe Aghion and Peter Howitt have written about role of ‘creative destruction’
Notably, Mokyr used historical sources as a means to uncover the reasons why sustained growth became the new norm.
This is the final award of the year given in recognition of outstanding contributions to humanity, according to the Nobel Foundation in Sweden.
The Royal Swedish Academy of Sciences decided to award the prize in two parts, the first to Mokyr of Northwestern University (USA) "for having identified the prerequisites for sustained growth through technological progress."
The other half was awarded jointly to Philippe Aghion of the Collège de France and INSEAD and the London School of Economics and Political Science (UK) and Peter Howitt of Brown University (USA) "for the theory of sustained growth through creative destruction."
The award came as countries worldwide push to turn around years of lacklustre economic growth since the 2008 financial crisis, amid concerns over a slowdown in productivity gains, sluggish progress on raising living standards, and mounting political tensions.
Aghion, a French economist, warned that “dark clouds” were gathering amid increasing barriers to trade and openness fuelled by Donald Trump’s trade wars. He also said innovation in green industries, and blocking the rise of giant tech monopolies would be vital to stronger growth in future.
“I’m not welcoming the protectionist wave in the US, and that’s not good for world growth and innovation,” he said.
Speaking as he accepted the prize, he said AI had “fantastic growth potential” but called on governments to develop strict competition policies to manage the growth of new tech companies.
Over the last two centuries, for the first time in history, the world has seen sustained economic growth.
This has lifted vast numbers of people out of poverty and laid the foundation of our prosperity. This year’s laureates in economic sciences, Joel Mokyr, Philippe Aghion and Peter Howitt, explain how innovation provides the impetus for further progress.
Technology advances rapidly and affects us all, with new products and production methods replacing old ones in a never-ending cycle. This is the basis for sustained economic growth, which results in a better standard of living, health and quality of life for people around the globe.
However, this was not always the case. Quite the opposite – stagnation was the norm throughout most of human history.
Despite important discoveries now and again, which sometimes led to improved living conditions and higher incomes, growth always eventually levelled off.
Joel Mokyr used historical sources as one means to uncover the causes of sustained growth becoming the new normal. He 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 latter was often lacking prior to the industrial revolution, which made it difficult to build upon new discoveries and inventions. He also emphasised the importance of society being open to new ideas and allowing change.
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