Nobel economics prize winners focus on tech, innovation

Summary

Marketplace Morning Report: Nobel Economics Prize Winners Focus on Tech, Innovation

Date: October 13, 2025
Host: David Brancaccio
Key Segment: The 2025 Nobel Prize in Economics awarded for research on innovation, technology, and economic growth, and the impact of policy and AI on the future.

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Episode Overview

This episode centers on the announcement of the Nobel Economics Prize winners, whose influential work unpacks how innovation and technology drive economic growth. The segment explores why their research is particularly relevant today, especially in the context of rapid technological change (notably AI). David Brancaccio and Marketplace's senior economics contributor Chris Farrell discuss the awardees, their contributions, and what their findings mean for the future of the economy.

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Key Discussion Points & Insights

1. Nobel Prize Announcement & the Winners

• Winners Announced (01:07)
  • Joel Mokyr (Northwestern University)
  • Philippe Aghion (France; teaches in Paris and London)
  • Peter Howitt (Brown University, Canada)
• “Their work also serves as a warning that history shows that growth is not inevitable and has to be nurtured.” – David Brancaccio (01:11)

2. The Central Question: What Drives Economic Growth?

• Chris Farrell emphasizes that the prize was awarded for answering:

  “What makes economies grow? What’s behind technological change and innovation? What leads to long term sustained economic growth?” – Chris Farrell (01:52)

• The winners are described as "essentially economic historians," focusing on the long-term drivers and risks to growth.

3. The Role of Ideas, Curiosity, and Societal Values

• Joel Mokyr’s scholarship is highlighted for emphasizing that:

  “It’s not coal or capital, you know, money. It’s when you look at the Industrial Revolution, it’s a society that valued curiosity, experimentation, practical problem solving. Inventors and scientists were celebrated.” – Chris Farrell (02:39)

• Importance of institutions supporting ideas and the "network effect" of people exchanging thoughts and experiments.

4. Creative Destruction and Policy Choices

• The discussion references Joseph Schumpeter and his concept of "creative destruction":

  "New companies rise, old ones fall, entire industries are reshaped." – Chris Farrell (03:24)

• Philippe Aghion is noted for linking policies in education, competition, and finance to whether innovation leads to growth or destruction.

5. Adaptation to Technological Shocks & Relevance of AI

• Peter Howitt studied the UK Industrial Revolution and how economies adapt to change, shocks, and new technologies (04:11).
• The Nobel Committee underscored the “rise of AI and all the disruptions that AI may have for our society and what the impact may be on economic growth.” – Chris Farrell (04:35)
• Awarding historians is also “a prize about a society and an economy of AI.” – Chris Farrell (04:47)

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Notable Quotes & Memorable Moments

• On the meaning of sustained growth:

  “Growth is not steady. … The closer you get to history … the more you realize, you know, new companies rise, old ones fall, entire industries are reshaped.” – Chris Farrell (03:23)

• The importance of nurturing growth:

  “History shows that growth is not inevitable and has to be nurtured.” – David Brancaccio (01:12)

• On the focus of the Nobel Committee:

  “One of the reasons why they awarded the prize … is largely the rise of AI and all the disruptions that AI may have for our society.” – Chris Farrell (04:25)

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Timestamps for Important Segments

• Nobel Prize announcement and winner background – 01:07–01:47
• Why the winners? – 01:52–02:09
• Joel Mokyr’s contributions and recommendations – 02:24–03:05
• On creative destruction and Aghion’s policy work – 03:05–04:02
• Peter Howitt on adaptation, relevance to AI – 04:02–04:50

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Market Update

[05:00] Brief summary of stock market reaction to global news:

• Stocks tumbled after rare earth restrictions by China and escalating U.S.–China trade tensions, but futures rebounded after conciliatory postings over the weekend.

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Additional Stories

• SNAP (Supplemental Nutrition Assistance Program) Changes [07:07–08:40]
  • USDA is rolling out major SNAP eligibility and work requirement changes, leaving states scrambling with little guidance or time for implementation (Colleen Heflin, 08:16).
  • “The administrative costs are going to go way up.” – Colleen Heflin (08:29)

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Tone & Language

Throughout, the tone is informative and conversational, echoing the urgency of understanding economic history in today’s context—particularly rapid technological change. The discussion is accessible to those interested in economics, innovation, and current global trends. The episode frames the past as a vital guide for navigating future disruptions, specifically those posed by AI.

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Useful For:

• Listeners wanting an accessible breakdown of the Nobel Economics Prize and why the winners matter today
• Those interested in the intersection of technology (AI), innovation, and long-term economic growth
• Anyone seeking insight on how societal values, institutions, and government policy shape prosperity

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This summary captures the essence of the episode, providing both expert insights and actionable takeaways on the ever-evolving forces that drive economic progress.

Transcript

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[David Brancaccio]

Winners of today's Nobel Economics Prize. And looking at their work, the two syllables AI come quickly to mind. I'm David Brancaccio in Los Angeles. There's word in the last hour that three professors who look at how innovation, including technology, drives economic growth will share the Nobel Economics Prize. It's Joel Machier of Northwestern University, Philippe Aguillon of France, who teaches in Paris in London, and Peter Howitt, a Canadian who works at Brown University in Providence. Their work also serves as a warning that history shows that growth is not inevitable and has to be nurtured. Marketplace's senior economics contributor Chris Farrell joins us now. Morning, Chris.

[Chris Farrell]

Good morning, David.

[David Brancaccio]

You've actually followed the work of at least one of these winners. Welcome.

[Chris Farrell]

Why'd they win these three essentially economic historians, I mean, they have delved deep into the most important question in economics. What makes economies grow? What's behind technological change and innovation? What leads to long term sustained economic growth?

[David Brancaccio]

Right. I mean, it's the most important economic question if this leads to bringing prosperity to actual human beings. Now, Joel Mockyer is a scholar that you've actually read into prior to this announcement.

[Chris Farrell]

Oh, and I would recommend for anybody to read his books, Leaver Riches, a collection of essays, the Gifts of Athena. He's just a brilliant economic historian. And what he's delved into, David, is he looks at behind growth. It's not coal or capital, you know, money. It's when you look at the Industrial Revolution, it's a society that valued curiosity, experimentation, practical problem solving. Inventors and scientists were celebrated. It's about the importance of ideas in those institutions that support the ideas and the network effect of people exchanging ideas in their experiments.

[David Brancaccio]

When you look at the work of these three scholars, Joel Makier, Philippe Aguillen of France and Peter Howitt at Brown, you know, the person I think of is Joseph Schumpeter, the Austrian economist, the creative destruction guy, thought a lot about, for instance, entrepreneurship and how it plays into economic growth, Right.

[Chris Farrell]

And this is absolutely critical. Growth is not steady. I mean, when you look and you've looked at those charts, David, right, over 200 years where you can barely see the Great Depression in there, right? It looks remarkably smooth. But the closer you get to history and economic history, the more you realize, you know, new companies rise, old ones fall, entire industries are reshaped. And so Agyan, one of the things that he's well known for, is looking about, you know, policy around education, competition, finance, how, how these affect whether societies get the kind of innovation that you want, the kind of innovation that leads to economic growth, or it may lead to economic destruction.

[David Brancaccio]

And Peter Howitt, I mean, he really also takes a very close look at economic history, focusing on the UK Industrial Revolution.

[Chris Farrell]

Yes, he's largely focused on Britain. And it's about, you know, you look over the past two centuries or so, you know, how do economies adapt to shocks, wars, new technologies? And one of the things that the Nobel Committee committee made very clear is one of the reasons why they awarded the prize to these economists at this particular point in time is largely the rise of AI and all the disruptions that AI may have for our society and what the impact may be on economic growth. So although these are economic historians, this is really a prize about a society and an economy of AI Marketplace's senior.

[David Brancaccio]

Economics contributor, Chris Farrell, thank you very much.

[Chris Farrell]

Thanks a lot.

[David Brancaccio]

Joel Machier gets half the Nobel Prize money. Philippe Aguillon and Peter Howitt split the other half markets after stock prices collapsed on Friday, after China tightened up controls on rare earth exports and President Trump escalated rhetoric about the U.S. china trade war. The S&P fell 2.7%. The Nasdaq closed down 3.6%. The Dow on Friday closed down 878 points, or 1.9%. Then over the weekend, Trump posted that the U.S. and China will work things out. And S and P Futures are up 1.4% now. Nasdaq futures are up about 2%. About two and a half hours here before the opening bell on Wall Street. So we're back to the condition when the whole market seems to turn on a few syllables this way or that on the Truth social platform. The bond market is closed today for Columbus Day. Indigenous Peoples Day.

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[David Brancaccio]

During unsettled economic times, there are programs that can immediately help individuals cover necessary costs, at least some of them. Economists call these program automatic stabilizers. Unemployment insurance is one example. So is Medicaid. And then there's the Supplemental Nutrition Assistance Program, also known as SNAP or indeed food stamps as Marketplaces. Carla Javier reports that program is about to undergo some big changes that'll change who is able it is able to support.

[Carla Javier]

Imagine a family, a parent loses their job, they go to the grocery store less. Diane Schanzenbach of Georgetown and Brookings says.

[Colleen Heflin]

Grocery stores see less demand and so they have to do things like, you know, lay off a bag boy. And so those families, their incomes go.

[Ryan (Million Bazillion Podcast Host)]

Down at the same time with snap.

[Carla Javier]

That first family buys those groceries and the bagger keeps their job. Earlier this month, the USDA notified states they need to make big changes to SNAP eligibility, work requirements and who's covering costs soon. Colleen Heflin at Syracuse University says normally changes like these are rolled out with a lot of guidance over time.

[Colleen Heflin]

But telling states October 3rd, you have to be in compliance November 1st is impossible.

[Carla Javier]

She says mistakes are going to be made, whether it's people losing benefits or just confusion.

[Colleen Heflin]

And the administrative costs are going to go way up.

[Carla Javier]

We reached out to the USDA for comment and it did not respond. I'm Carla Javier from Marketplace and in.

[David Brancaccio]

Los Angeles, I'm David Brancaccio. You're listening to the Marketplace morning report from APM American Public Media.

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This week on Million Bazillion. Ryan and I are off to a sleepaway camp for podcasters where we meet up with some other podcast friends for a very special episode about animals and money. Together, we're going to tackle some very important questions, like what animal should be in charge of the economy?

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Well, like I said, there's plenty of crossover between the animal kingdom and your world of money.

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Don't miss this special episode. Listen a million Bazillion on your favorite podcast.

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