The Daily Brief The 2025 Nobel Prize in Economics: a breakdown
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Oct 20, 2025 Discover the intriguing link between knowledge and economic growth as the show explores why the Industrial Revolution began in Europe. The discussion highlights how competition and institutions foster innovation, exemplified by James Watt's advancements. Then, delve into the aerospace industry's complexities, uncovering the reasons for aircraft leasing over purchasing, and how geopolitical shifts are reshaping demand. Learn about India's ambitions for a domestic leasing hub and the challenges in cultivating a competitive market.
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Knowledge Interaction Sparked Growth
- Joel Mokyr argues growth began when propositional and prescriptive knowledge started interacting and reinforcing each other.
- Openness to ideas, institutional support, and willingness to change enabled the Industrial Revolution in Britain.
Political Fragmentation Fueled Innovation
- Mokyr credits Europe's fragmented political structure and institutions like the Royal Society for enabling intellectual mobility and competition.
- That cross-border Republic of Letters and Enlightenment culture let theory and practice feed each other.
Creative Destruction As A Growth Engine
- Aghion and Howitt formalized creative destruction by making innovation endogenous in growth models.
- Their framework links firm entry, exit, and R&D races directly to macroeconomic growth.
