We break down the 2025 Economics Nobel Prize, which was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their “having explained innovation-driven economic growth.” We discuss why these contributions matter and reflect on the broader importance of understanding long-term economic growth. Along the way, we also share our own reactions and what stood out about this year’s selection.
In this episode, we discuss:
* The 2025 Nobel Prize in Economics and how it was split among three researchers
* Joel Mokyr’s work on the conditions needed for technological progress
* Philippe Aghion and Peter Howitt’s model of creative destruction
* The idea of the “hockey stick of growth” and what triggered the Industrial Revolution
* Why understanding long-run growth matters in today’s economy
* And a whole lot more!
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Some show notes:
It’s that time of semester where the the to-do lists seem to grow faster than our patience. But it also means that it’s Nobel Prize Week! To celebrate, Jadrian went with a non-alcoholic cucumber-watermelon refresher since he was in the office. Matt, on the other hand, was able to crack open a New Trail Conifer Cosmos Hazy IPA.
This week’s episode centered on the 2025 Nobel Prize in Economic Sciences, awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their research on innovation-driven growth. Mokyr received half the prize for explaining the prerequisites for sustained technological progress, while Aghion and Howitt shared the other half for their work on creative destruction.
Mokyr’s work has been grounded in economic history, and highlights the importance of institutional and social foundations in sustaining technological progress. Aghion and Howitt’s model builds on Schumpeter’s idea of creative destruction, where innovation continuously disrupts old technologies and drives growth forward.
There has been a great metaphor that often gets tossed around to describe modern growth: the “hockey stick” of economic growth. For centuries, global income remained largely flat until the Industrial Revolution, when technological advancement caused a steep rise in prosperity. Mokyr, Aghion, and Howitt’s work focused on the theoretical models that explained the dramatic turning point in history.
It’s hard to overstate how vital these ideas are. Understanding growth may be the single most important question in economics.
Both of us were familiar with the stories surrounding the hockey stick of growth, but neither of us were familiar with the three individuals who were selected. In no way is that a knock on the winners, but rather a highlight of the many subjects that economists study. Because there are so many topics to pick from, many economists tend to specialize in their frield. That makes it challenging to keep up with major work outside your own fields.
This week’s pop culture references:
Matt pointed out the lack of economic growth in Game of Thrones, noting that overhead shots of King’s Landing look nearly identical to those shown 200 years earlier in House of the Dragon. It’s a fun example of what it looks like when an economy doesn’t experience technological progress or creative destruction. It’s just the same buildings and no evidence of any hockey sticks.
Jadrian grabbed a funny scene from Talladega Nights where Ricky Bobby claims that with modern medicine, he might live to be 245 years old. It’s a humorous take on how the technological progress studied by this year’s Nobel Laureates shapes expectations about the future.
