Nobel economics prize goes to 3 researchers for explaining innovation-driven economic growth

STOCKHOLM (AP) — Three researchers who probed the process of business innovation won the Nobel memorial prize in economics Monday for explaining how new products and inventions promote economic growth and human welfare, even as they leave older companies in the dust.

Their work was credited with helping economists better understand how ideas and technology succeed by disrupting established ways — a process as old as steam locomotives replacing horse-drawn wagons and as contemporary as e-commerce shuttering shopping malls.

The award was shared by Dutch-born Joel Mokyr, 79, who is at Northwestern University; Philippe Aghion, 69, who works at the Collège de France and the London School of Economics; and Canadian-born Peter Howitt, 79, who is at Brown University.

The winners were credited with better explaining and quantifying “creative destruction,” a key concept in economics that refers to the process by which new innovations replace older technologies and businesses.

The concept is usually associated with economist Joseph Schumpeter, who outlined it in his 1942 book “Capitalism, Socialism and Democracy.” Schumpeter called the concept “the essential fact about capitalism.”

The Nobel committee said Mokyr “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.”

Aghion and Howitt studied the mechanisms behind sustained growth, including in a 1992 article that offered a complex mathematical model for creative destruction that added new aspects not included in earlier models.

Examples of creative destruction include e-commerce disrupting retail, streaming services replacing videocassette and DVD rentals and internet advertising undermining newspaper advertising. A classic illustration is horse-cart whip makers put out of business by the automobile.

“The laureates’ work shows that economic growth cannot be taken for granted. We must uphold the mechanisms that underlie creative destruction, so that we do not fall back into stagnation,” said John Hassler, chair of the committee for the prize in economic sciences.

Howitt and Aghion’s model showed that markets with too few dominant companies can hinder innovation and growth — a concern that has been raised about industries such as telecommunications, social media platforms and airlines.

They found it was important to support people who are affected by changes while making it easy to move to more productive workplaces — to protect workers more than specific jobs. They also stressed the importance of social mobility, where a person's profession or trade is not defined by their parents' identity.

Mokyr has long been known as an optimist about technological innovation. About a decade ago, many economists took a more pessimistic view, arguing that inventions such as smartphones or even the internet had less of an economic impact than previous developments such as the airplane or the car.

Mokyr responded that because many new services were either cheap or free, their impact wasn’t evident in economic data, but they still provided enormous benefits.

In an interview with The Associated Press in 2015, he cited the music streaming service Spotify as an example of an “absolutely astonishing” innovation that economists had difficulty measuring. Mokyr noted he once owned more than 1,000 CDs and many vinyl records, but now he could access a huge music library for a small monthly fee.

He acknowledged that new inventions often cause at least short-term job loss or reduced earnings for workers. Like many economists, he argued that innovations also created unexpected jobs that offered fresh opportunities.

The Nobel committee noted that for much of human history, economic stagnation, rather than growth, was the norm. Starting with the Industrial Revolution in the 18th century, European and later other economies began to grow.

Innovation — and how to foster it — is an urgent question in Europe, where a report by former European Central Bank head Mario Draghi argued that Europe faces a rising productivity gap with the U.S. in digital technology. Aghion said the challenge was for Europe to keep pace with the U.S. and China in innovation by promoting research and the venture capital financing to turn ideas into businesses.

“We have to wake up," he told AP. "Because you know who will win in this competition? Those who innovate.”

Aghion said he believes artificial intelligence has “huge growth potential, but it all depends on the institutions and policies we put in place.” He said policies need to foster competition because big actors already in the sector know how to manage regulations, and that may discourage new entrants.

Mokyr said the notion that AI is a “monstrosity” that will drive humans into extinction comes from “people who have read too much dystopian fiction. Nothing of the sort is ever going to happen.”

Instead, he said at a news conference at Northwestern that he views it “primarily as a magnificent research assistant” that can gather and process information quickly.

He also disputed the notion that machines replace people. “They move us to more interesting, more challenging work," he said.

Mokyr said he awoke around 5 a.m. and opened his laptop to find multiple congratulatory messages, which confused him. He checked his phone and saw a message from a Swedish number. He called it and was told he won the prize.

“I think I sat there for 15 minutes, sort of dazed,” he told AP in an interview at his home in Skokie, Illinois. He will turn 80 next summer but said he has no plans to retire.

“This is the type of job that I dreamed about my entire life,” he said.

Howitt said he discovered he had won the Nobel prize when a Swedish reporter called him as he was waking up. At first, he thought it was a hoax.

“We had no Champagne in the refrigerator. We were not anticipating this,” he joked with reporters.

Aghion said the Nobel committee did not have his co-winners’ contact information, so they asked him for it.

"It’s really the dream prize, with the people I dreamed of getting it with,” Aghion said.

One half of the 11 million Swedish kronor (nearly $1.2 million) prize goes to Mokyr, and the other half is shared by Aghion and Howitt. Winners also receive an 18-carat gold medal and a diploma.

The economics prize is formally known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. The central bank established it in 1968 as a memorial to Nobel, the 19th-century Swedish businessman and chemist who invented dynamite and established the five Nobel Prizes.

Since then, it has been awarded 57 times to a total of 99 laureates. Only three of the winners have been women.

Nobel purists stress that the economics prize is technically not a Nobel Prize, but it is always presented together with the others on Dec. 10, the anniversary of Nobel’s death in 1896.

Nobel honors were announced last week in medicine, physics, chemistry, literature and peace.

McHugh reported from Frankfurt, Germany. Rugaber reported from Washington and Corder from The Hague, Netherlands. Associated Press journalists John Leicester and Oleg Cetinic in Paris, Laura Bargfeld in Skokie, Illinois, and Kimberlee Kruesi in Providence, Rhode Island, contributed to this report.

Joel Mokyr poses for a photo at his home, Monday, Oct. 13, 2025, in Skokie, Ill., after winning the Nobel prize in economics. (AP Photo/Nam Y. Huh)

Joel Mokyr after winning the Nobel prize in economics, Monday, Oct. 13, 2025, in Skokie, Ill. (AP Photo/Nam Y. Huh)

France's Philippe Aghion reacts before an interview with the Associated Press after winning the Nobel prize in economics, Monday, Oct. 13, 2025 in Paris. (AP Photo/Thibault Camus)

France's Philippe Aghion smiles before an interview with the Associated Press after winning the Nobel prize in economics Monday, Oct. 13, 2025 in Paris. (AP Photo/Thibault Camus)

Professor John Hassler, from left, Hans Ellegren, Permanent Secretary of the Academy of Sciences and Professor Kerstin Enflo, announce Joel Mokyr, Philippe Aghion and Peter Howitt as the recipients of the Nobel Memorial Prize in Economics during a press conference at the Royal Swedish Academy of Sciences in Stockholm, Sweden, Monday, Oct. 13, 2025. (Anders Wiklund/TT News Agency via AP)

Professor John Hassler, from left, Hans Ellegren, Permanent Secretary of the Academy of Sciences and Professor Kerstin Enflo, announce Joel Mokyr, Philippe Aghion and Peter Howitt as the recipients of the Nobel Memorial Prize in Economics during a press conference at the Royal Swedish Academy of Sciences in Stockholm, Sweden, Monday, Oct. 13, 2025. (Anders Wiklund/TT News Agency via AP)

Joel Mokyr, from left, Philippe Aghion and Peter Howitt (on screen) announced as the recipients of the Nobel Memorial Prize in Economics during a press conference at the Royal Swedish Academy of Sciences in Stockholm, Sweden, Monday, Oct. 13, 2025. (Anders Wiklund/TT News Agency via AP)

Professor John Hassler, from left, Hans Ellegren, Permanent Secretary of the Academy of Sciences and Professor Kerstin Enflo, announce Joel Mokyr, Philippe Aghion and Peter Howitt as the recipients the Nobel Memorial Prize in Economics during a press conference at the Royal Swedish Academy of Sciences in Stockholm, Sweden, Monday, Oct. 13, 2025. (Anders Wiklund/TT News Agency via AP)

FILE - French economist Philippe Aghion attends a round table discussion on the 'The future of European competitiveness' at the College de France in Paris, France, Wednesday, Nov. 13 2024. (Teresa Suarez, Pool via AP, File)

FILE - A Nobel Prize medal is displayed before a ceremony at the Swedish Ambassador's Residence in London, Monday, Dec. 6, 2021. (AP Photo/Matt Dunham, File)

SANTIAGO, Chile (AP) — A hard-right former lawmaker and admirer of U.S. President Donald Trump held the upper hand as Chile headed to a polarizing presidential runoff against a member of Chile's Communist Party representing the incumbent government.

José Antonio Kast, an ultraconservative lawyer opposed to abortion and same-sex marriage, appears to be in pole position after nearly 70% of votes went to right-wing candidates in Sunday's first round, as many Chileans worry about organized crime, illegal immigration and unemployment in one of Latin America’s safest and most prosperous nations.

Kast is a surprise front-runner who speaks fondly of aspects of the country's period of dictatorship and broke with the traditional conservative party to found his own Republican Party.

He came in second with nearly 24% of the vote after campaigning on plans to crack down on crime, build a giant border wall and deport tens of thousands of undocumented migrants.

Jeannette Jara, a former labor minister in President Gabriel Boric’s left-wing government, eked out a narrower-than-expected lead with 27% of the vote. She wants to expand Chile's social safety net and tackle money laundering and drug trafficking.

Neither contender received more than 50% of the overall vote count, sending the poll to a second round of voting on Dec. 14.

The mood was ebullient at Kast's campaign headquarters early Monday, where young Chileans wrapped in national flags drank beer and rolled cigarettes as workers took down the stage where Kast had proclaimed a radical transformation in the country's security.

“We needed a safe candidate, someone with a firm hand to bring economic growth, attract investment, create jobs, strengthen the police and give them support,” said Ignacio Rojas, 20. “Chile isn't safe anymore, and he'll change that.”

The results seemed set to extend a growing regional shift across Latin America, as popular discontent with the economy simmers and right-wing challengers take over from leftist politicians who shot to power in the wake of the pandemic on lofty promises of social change and more equitable distribution of wealth, but largely failed to deliver.

"Economies are not growing, there are no new jobs, and people remember that 10 years ago they used to pay lower prices for almost everything,” said Patricio Navia, a Chilean analyst and professor at New York University.

“Voters are upset with governments all over the region,” he added.

Conservatives led the pack in Chile's eight-candidate field, with populist businessman and celebrity economist Franco Parisi surprising pundits by securing 20% of the votes and third place. Like Kast, he ran a tough law and order campaign, vowing to plant land mines along Chile’s porous northern border to prevent people from crossing.

Another 14% of the votes went to Johannes Kaiser, a libertarian congressman and a former YouTube provocateur who campaigned as an even more radical alternative to Kast.

Chile’s traditional center-right coalition landed in fifth place, with establishment candidate Evelyn Matthei winning 12.5% of the vote.

Not all of the divided right is guaranteed to go to Kast. Several Kaiser and Matthei voters interviewed at polling stations on Sunday — including members of the LGBTQ community, women and atheists — said they'd refuse to support Kast, citing his deeply conservative Christian values.

But it's also unlikely that voters who supported Kaiser's plans to deport undocumented migrants to prison in El Salvador, or Matthei's plans to consider bringing back the death penalty, would vote for a lifelong member of Chile's Communist Party.

There were no other left-wing front-runners, as all six parties in Chile's governing coalition threw their weight behind Jara.

After learning of the election results late Sunday, Matthei rushed to Kast's party headquarters to profess her support for her right-wing rival. “Chile needs a sharp change of direction,” she said.

Kaiser also promised to back Kast, saying his libertarian party would "ensure that a sound doctrine and defense of freedom are not abandoned.”

Parisi voters run the gamut, eschewing elites on the left and right. The political outsider was coy after the results came out, saying, “We don’t give anyone a blank check."

“The burden of proof lies with both candidates,” he said. “They have to win people over.”

Economic travails and fervent anti-incumbent sentiment appear to have fueled a gradual pendulum swing away from the left-wing leaders who were ascendant across the region just a few years ago.

In Argentina, radical libertarian President Javier Milei, elected in late 2023 on a vow to break with years of left-leaning populism, has dramatically cut public spending, doubling down on his close bond with Trump and reshaping Argentina's foreign policy in line with the U.S.

Elections over the last year in Ecuador, El Salvador and Panama have kept right-wing leaders in office, while in Bolivia, restive voters outraged over a currency crisis punished the Movement Toward Socialism party and elected a conservative opposition candidate for the first time in nearly 20 years.

The right’s gains could buoy the U.S. as it competes for regional influence with China, some analysts say, with a new crop of leaders keen for American investment. Chile is the world’s largest copper producer and home to vast reserves of other minerals key to the global energy transition.

Like many hopeful leftists four years ago, President Boric, a young former student activist elected on the heels of Chile's 2019 mass protests over widening inequality, pledged to raise taxes on the rich and adopt one of the world’s most progressive constitutions, ran into major legislative opposition.

That won't be the case for Kast if he wins.

As results from parliamentary elections crystalized early Monday, it appeared that right-wing parties would hold a decisive majority in the 155-member lower house of Congress, a body that has skewed left since Chile's 1990 return to democracy.

Presidential candidate Jeannette Jara of the Unidad por Chile coalition addresses supporters after early results in the general elections in Santiago, Chile, Sunday, Nov. 16, 2025. (AP Photo/Natacha Pisarenko)

Presidential candidate Jose Antonio Kast of the Republican Party, and his wife Maria Pia Adriasola, wave to supporters after early results in the general elections in Santiago, Chile, Sunday, Nov. 16, 2025. (AP Photo/Esteban Felix)

Presidential candidate Jose Antonio Kast of the Republican Party, waves to supporters after early results in the general elections in Santiago, Chile, Sunday, Nov. 16, 2025. (AP Photo/Esteban Felix)

Presidential candidate Jose Antonio Kast of the Republican Party, addresses supporters after early results in the general elections in Santiago, Chile, Sunday, Nov. 16, 2025. (AP Photo/Cristobal Escobar)