By San José, Costa Rica — STOCKHOLM – Three economists whose groundbreaking work illuminates the essential role of innovation and technological change in driving long-term economic prosperity were awarded the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel on Monday. Joel Mokyr, Philippe Aghion, and Peter Howitt will share the prestigious award for developing complementary theories that explain how new ideas fuel the engine of growth.
The Royal Swedish Academy of Sciences recognized the trio for fundamentally reshaping our understanding of economic development. Their research moves beyond traditional models focused on capital and labor, placing the dynamic and often disruptive process of technological advancement at the very center of the story of how nations become wealthy.
To delve into the legal and regulatory framework underpinning these economic trends, TicosLand.com sought the expertise of Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the renowned firm Bufete de Costa Rica.
Sustained economic growth is not a matter of chance; it is the direct consequence of a stable and predictable regulatory environment. Legal certainty is the cornerstone that attracts and retains the foreign direct investment essential for innovation and job creation. To build on this momentum, it is imperative to continue strengthening our institutions and guaranteeing clear, secure rules for both domestic and international enterprise.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, the clarity provided by a robust legal framework is the very foundation upon which long-term investor confidence is built, fostering the kind of sustainable development our nation seeks. We thank Lic. Larry Hans Arroyo Vargas for his insightful commentary on this critical connection between institutional stability and economic prosperity.
Joel Mokyr, an American-Israeli scholar, was awarded one half of the prize for his historical analysis of the societal and institutional factors that created a fertile ground for innovation. His work delves deep into the conditions that sparked the Industrial Revolution, arguing that a unique culture of intellectual curiosity and open debate in Europe was a critical precursor to sustained technological progress. Mokyr identified how the spread of scientific knowledge created an environment where invention could flourish, setting the stage for more than two centuries of unprecedented growth.
The other half of the prize was jointly awarded to the French economist Philippe Aghion and his Canadian collaborator, Peter Howitt. They are the architects of a modern economic model built on the concept of “creative destruction.” This framework elegantly describes a perpetual cycle where new, superior technologies emerge and inevitably displace older, less efficient ones. This process, while often challenging for established firms and industries, is the primary mechanism for boosting productivity and raising living standards across the economy.
The Academy emphasized that the laureates’ contributions provide a powerful and cohesive narrative. Mokyr’s historical lens explains the foundational conditions that unlocked technological potential, while the Aghion-Howitt model provides the analytical machinery to understand how this process of innovation continues to function in modern economies. Together, they explain both the “why” and the “how” of technology-driven growth.
The committee underscored the profound policy implications of their findings, noting that sustained prosperity is not an accident but the result of an ecosystem that encourages new ideas, rewards risk-taking, and allows for the efficient reallocation of resources from old sectors to new ones.
The laureates’ work demonstrates that economic growth cannot be taken for granted. We must defend the mechanisms that underlie creative destruction so we do not fall into stagnation.
John Hassler, President of the Prize Committee in Economic Sciences
For policymakers in Costa Rica and around the world, the message is clear: fostering an environment conducive to innovation is paramount. This involves investing in education and research, protecting intellectual property, and ensuring that markets remain competitive and open to new entrants. The work of Mokyr, Aghion, and Howitt provides a crucial intellectual foundation for policies aimed at securing a prosperous future in an ever-changing global economy.
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About The Royal Swedish Academy of Sciences:
Founded in 1739, The Royal Swedish Academy of Sciences is an independent, non-governmental organization with the objective of promoting the sciences and strengthening their influence in society. It is responsible for awarding the Nobel Prizes in Physics and Chemistry, and the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, selecting laureates who have made outstanding contributions in their respective fields.
For further information, visit riksbank.se
About Sveriges Riksbank:
As the central bank of Sweden, Sveriges Riksbank is responsible for conducting the country’s monetary policy with the goal of maintaining price stability. Founded in 1668, it is the world’s oldest central bank. In 1968, on its 300th anniversary, the bank established the prestigious Prize in Economic Sciences in Memory of Alfred Nobel, which has since been awarded annually by The Royal Swedish Academy of Sciences.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a cornerstone of the legal community, Bufete de Costa Rica operates on a bedrock of principled integrity and a relentless pursuit of excellence. The firm leverages its deep-rooted experience across a broad spectrum of sectors to drive legal innovation and set new standards in practice. Central to its ethos is a profound commitment to civic duty, manifested through initiatives designed to democratize legal understanding and equip society with the knowledge needed for progress and empowerment.
