The European Central Bank published an ECB Blog post summarising the research recognised by the Sveriges Riksbank Prize in Economic Sciences, focusing on how technological progress underpins sustained economic growth and what this implies for the euro area. The post highlights Joel Mokyr’s historical work on the Industrial Revolution, arguing that sustained growth depends not just on inventing technologies but also on their diffusion, upkeep and the stock of transferable know-how, supported by a critical mass of skilled practitioners (“Upper Tail Human Capital”) and openness to ideas. It also reviews Philippe Aghion and Peter Howitt’s “creative destruction” framework, where growth is driven by continuous R&D competition that yields temporary monopoly profits while displacing older technologies, firms and workers, implying trade-offs and a need to balance competition policy, patent protection, subsidies and social insurance. Linking to Europe’s growth debate, the blog points to increased R&D investment and streamlined regulation that supports business dynamism as levers to strengthen innovation and competitiveness, while noting the disruptive nature of innovation-led growth.
European Central Bank 2025-10-20
European Central Bank reviews Nobel Prize-winning research on technology-driven growth and creative destruction
The European Central Bank's blog highlights research recognized by the Sveriges Riksbank Prize, emphasizing technological progress as a driver of sustained euro area growth. It notes Joel Mokyr's insights on the Industrial Revolution, technology diffusion, and skilled practitioners, alongside Aghion and Howitt's "creative destruction" framework. The post suggests increased R&D investment and streamlined regulation to boost innovation and competitiveness, acknowledging innovation-led growth's disruptive impact.