More or Less Nobel economics prize 2025: What's the big idea?
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Oct 18, 2025 This week, the Nobel Prize in Economic Sciences celebrates Joel Mokyr, Philippe Aghion, and Peter Howitt for their groundbreaking work on innovation-driven growth. Discover why economic growth is key to improving living standards. Explore Mokyr's insights into the Industrial Revolution's growth surge and the intriguing concept of creative destruction, where new technologies disrupt old industries. Lastly, delve into the Aghion-Howitt model that links incentives in research to sustainable economic progress.
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Why Economic Growth Matters
- Economic growth raises living standards across many areas, not just income.
- Tim Harford explains growth as more people getting richer with better medicine, houses and transport.
Ideas Drive Growth Beyond Capital
- Traditional models blamed capital accumulation for growth but sidelined ideas and technology.
- The laureates focused on how science and technology actively drive sustained growth.
Mokyr’s Prescriptive vs Propositional Knowledge
- Joel Mokyr contrasts prescriptive (practical) and propositional (theoretical) knowledge in the Industrial Revolution.
- He shows how engineers and scientists interacted, creating a self-reinforcing cycle of better theories and better inventions.