- Person
- Philippe Aghion
- Lived
- b. 1956
- Field
- Economics of growth
- From
- French
The story
Philippe Aghion was born in Paris in 1956 to parents from Jewish families in Alexandria, Egypt; his mother, Gaby Aghion, founded the fashion house Chloé. Trained first as a mathematician, he earned his economics doctorate at Harvard in 1987 and went on to teach at MIT, Oxford, University College London, Harvard, the London School of Economics, the Collège de France and INSEAD.
In 1992 he and the Canadian economist Peter Howitt published a mathematical model of an idea the economist Joseph Schumpeter had made famous: creative destruction. In their model, firms invest in research to make better products or cheaper processes. A successful innovator climbs to the top of the market and earns profits until a rival’s new innovation pushes it off. The hope of those temporary profits drives investment in research, and the constant turnover of products and firms drives growth. The Nobel committee noted that it was the first macroeconomic model of creative destruction in which production, research, savings and financial markets were analysed together.
The model had practical consequences. It showed that markets may invest too little in research, because each innovation benefits later innovators who build on it, which supports public funding of research. Later work by Aghion and colleagues found an inverted-U relationship between competition and innovation: both too little and too much competition hold innovation back. One explanation for slower growth in recent decades, drawn from his framework, is that some companies have become too dominant and block new entrants.
Because creative destruction destroys jobs as well as creating them, Aghion’s work also points to protecting workers rather than particular jobs, through systems such as flexicurity that help people move into new work. He has applied his ideas to university reform, to the middle-income trap and, as co-chair of France’s Commission on Artificial Intelligence in 2024, to policy for AI. In 2025 he and Howitt shared half of the Nobel Memorial Prize in Economic Sciences for the theory of sustained growth through creative destruction.
Why it matters
Aghion’s framework helps governments decide how to fund research, when to rein in dominant firms and how to support workers displaced by new technology, choices that shape jobs and living standards for millions.
About Philippe Aghion
Paris-born economist, son of Egyptian Jewish parents, whose theory of growth through creative destruction now guides innovation and competition policy. Nobel 2025.
Sources
- Popular information: From stagnation to sustained growth NobelPrize.org
- Philippe Aghion Wikipedia
- Press release: The Prize in Economic Sciences 2025 NobelPrize.org
Another act of tikkun olam. This is part of tikkun olam, the Jewish idea of repairing the world, and every one of us can add to it.