Overview

• The Royal Swedish Academy awarded the 2025 economics prize to Philippe Aghion, Peter Howitt and Joel Mokyr for work showing that technological innovation and creative destruction drive sustained growth.
• Prize committee president John Hassler cautioned that growth cannot be taken for granted and said the mechanisms that sustain innovation must be protected to avoid stagnation.
• In an interview, Aghion said expanding organized crime is a major brake on development because it pushes activity into the informal sector, urging investment in public security financed by reliable taxation.
• Policy recommendations highlighted in the coverage include stronger national education standards, teacher training, research subsidies, smart industrial policy, and transparent, continually evaluated public spending.
• Regional analyses link Peru’s stagnant productivity, high informality and institutional erosion—including a recent presidential vacancy—to barriers for innovation, with the Nobel Peace recognition of María Corina Machado reinforcing the tie between democracy and prosperity.