Stockholm (AFP) – The Nobel prize in economics was awarded on Monday to American-Israeli Joel Mokyr, France’s Philippe Aghion, and Canada’s Peter Howitt for their work on how technology drives and affects growth. Mokyr, 79, won one half of the prize “for having identified the prerequisites for sustained growth through technological progress,” the Royal Swedish Academy of Sciences said. Aghion, 69, and Howitt, 79, shared the other half “for the theory of sustained growth through creative destruction,” it added.
John Hassler, chair of the prize committee, told reporters their work answered questions about how technological innovation drives growth and how sustained growth can be maintained. “During almost all of humankind’s history, living standards did not change noticeably from generation to generation. Economic growth was, on average, zero, and stagnation was the norm,” Hassler said. But over the last two centuries, “things have been very different.”
During the last 200 years, the world has seen more economic growth than ever before in human history, Kerstin Enflo, a member of the economics prize committee, explained to reporters. However, she cautioned that “200 years is still just a short period compared to the long run history of stagnation that we saw before.” “The laureates’ work reminds us that we should not take progress for granted. Instead, society must keep an eye on the factors that generate and sustain economic growth,” Enflo said.
Mokyr, who is a professor at Northwestern University in the United States, “used historical sources as one means to uncover the causes of sustained growth becoming the new normal,” the jury said in a statement. He was spotlighted for demonstrating 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, the jury said.
Speaking to the Nobel Foundation, Mokyr said he had first missed the call from Sweden and that the news was “overwhelming.” “Everybody says this, but I’m really being truthful …this came as a total surprise,” the economic historian said. “I had a whole list of people that I thought were going to win, and I wasn’t on it,” he added.
Meanwhile, Aghion and Howitt created a mathematical model for “creative destruction,” which refers to the process “when a new and better product enters the market, the companies selling the older products lose out.” Howitt is a professor emeritus of economics at Brown University in the United States, while Aghion is a professor at College de France and INSEAD in Paris and the London School of Economics and Political Science. “I’m still speechless. It came really as a huge surprise,” Aghion told reporters via telephone during the prize announcement.
Speaking about what could risk upsetting growth, he mentioned the threats of steep tariffs introduced since US President Donald Trump’s return to the White House. “Openness is a driver of growth. Anything that gets in the way of openness is an obstacle to growth,” Aghion said.
French President Emmanuel Macron congratulated his compatriot. “With his vision of growth through innovation, he illuminates the future and proves that French thinking continues to enlighten the world,” Macron said in a post on X.
The economics prize is the only Nobel not among the original five created in the will of Swedish scientist Alfred Nobel, who died in 1896. It was instead created through a donation from the Swedish central bank in 1968, leading detractors to dub it “a false Nobel.” But like the Nobels in chemistry and physics, the Royal Swedish Academy of Sciences chooses the winner and follows the same selection process.
The economics prize wraps up this year’s Nobel season, which honoured research into the human immune system, practical applications of quantum mechanics, and the development of new forms of molecular architecture. The literature prize went to Hungarian author Laszlo Krasznahorkai, whose works explore themes of postmodern dystopia and melancholy. Venezuelan opposition leader Maria Corina Machado was given the highly watched Nobel Peace Prize.
The Nobel economics prize consists of a diploma, a gold medal, and a $1.2 million cheque.
© 2024 AFP
