Nobel Economics Prize Awarded too Aghion, Howitt, and Nordhaus for Innovation Research
STOCKHOLM – Philippe Aghion, Peter Howitt, and Paul M. Nordhaus have been jointly awarded the 2023 Nobel Prize in Economics for their groundbreaking work on innovation,growth,and the concept of “creative destruction.” The royal Swedish Academy of Sciences recognized their research for revealing how innovation drives long-run economic growth.
The award arrives as the global economy potentially stands on the cusp of a new era fueled by artificial intelligence, but also amidst growing concerns about trade barriers and technological competition. Aghion and Howitt’s research, developed independently and then collaboratively, built upon the earlier work of Nordhaus, who pioneered the integration of climate change into long-run economic modeling.
Speaking at a press conference, Aghion emphasized the detrimental effects of protectionist policies. “De-globalisation and tariff barriers were ‘obstacles to growth,'” he stated, adding that “the bigger the market the more possibilities to exchange ideas, transfer technologies and for healthy competition.” He warned,”Anything that gets in the way of openness is an obstacle to growth. So I see there kind of dark clouds currently accumulating, pushing for barriers to trade and openness.”
Aghion also urged Europe to reassess its approach to industrial policy,advocating for a balance between competition and strategic investment. ”In Europe, in the name of competition policy, we became very anti any form of industrial policy. I think we need to evolve on that and find ways to reconcile industrial policy in areas like defense, climate, AI, biotech,” he said.
howitt echoed concerns about trade policies, specifically criticizing former President Trump’s tariffs. He explained to Reuters that such measures “are going to discourage innovation by reducing what we call the scale effect.” He further stated, ”Starting a tariff war just reduces the size of the market for everybody.” Howitt also questioned the economic wisdom of attempting to reshore manufacturing jobs to the United States, arguing, “We’re good at designing running shoes, but it’s best for us to leave others to make them.”
The Nobel Prizes in medicine, physics, chemistry, and peace were announced last week, continuing a tradition established by Alfred Nobel’s will in 1895 and first awarded in 1901, with interruptions primarily due to the World Wars.
Reuters
