On October 13, 2025, the Royal Swedish Academy of Sciences honored Philippe Aghion, Joel Mokyr, and Peter Howitt for their work on innovation and sustainable growth. The next day, in Paris, Aghion proposed a "clock interruption" of pensions, freezing the legal age at 62 years and 9 months until 2027. Between Stockholm and France, a common thread: political stability, financial credibility, and a path of growth driven by innovation for the transition.
Key Facts
On October 13, 2025, the Royal Swedish Academy of Sciences awarded the Sveriges Riksbank Prize in Economic Sciences to Joel Mokyr, Philippe Aghion, and Peter Howitt. According to the official decision, half of the prize goes to Joel Mokyr "for identifying the conditions for sustainable growth through technological progress," with the other half being shared by Philippe Aghion and Peter Howitt "for the theory of sustainable growth via creative destruction." On October 14, 2025, as a guest on the morning show, Philippe Aghion proposed a "clock interruption" of the pension reform in France: freezing the legal age at 62 years and 9 months until the 2027 presidential election, before re-examination. He assumes a budgetary cost he considers "modest"; meanwhile, economic analysis highlights that prolonged instability can fuel tensions on interest rates.
A Work at the Crossroads of Schumpeter and Public Policy
In the tradition of Joseph Schumpeter, Philippe Aghion reconfigured the idea of creative destruction to fit into an endogenous growth economy: innovations driven by heterogeneous companies stimulate productivity, shift the technological frontier, and constantly renew the productive fabric. With Peter Howitt, he modeled in the 1990s a mechanism where competition, incentives, and intellectual property determine the pace of progress. This approach feeds concrete recommendations: contestable markets, research funding, competition policy attentive to dynamic effects, education, and social mobility.
Aghion’s originality lies in the institutional translation of these ideas: designing industrial policies compatible with competition, directing investment towards clean technologies, reconciling ecological transition and sustainable growth through innovation (carbon capture and storage, batteries, efficient processes), and calibrating regulation without stifling experimentation.
Joel Mokyr: The Long History of Ideas and Techniques
Economic historian Joel Mokyr sheds light on the long term: modern growth is not an accident, but the result of a culture of knowledge made of accumulation and diffusion. He demonstrates how scholarly communities fostered a virtuous loop between science and technology. Moreover, open institutions contributed to this positive effect. Finally, an ethic of inquiry reinforced these favorable conditions. His work explains why some societies shift towards prosperity while others remain stagnant. This perspective complements the Schumpeterian model: without ecosystems of ideas and credible institutions, creative destruction stalls.
Peter Howitt: The Micro of Firms in Service of the Macro
Peter Howitt anchors the model in the microeconomics of innovative firms: research and development, productivity gains, and the exit of less efficient firms explain the entry-exit cycles that, when aggregated, produce sustainable growth. In this view, competition is not just a price trade-off: it acts on the structure of incentives that drives invention, diffusion, and adoption. Hence, a precise reading of policy effects: entry barriers, mergers and acquisitions creating rents, innovation taxation, data protection, pro-innovation environmental standards.
A Scene: The Lecture Hall and the Workshop
In a lecture hall at the Collège de France, names follow one another on the board: Schumpeter, Arrow, Solow. White chalk, simple diagrams. Philippe Aghion begins with a stylized fact: economies grow when they invent faster than they replace. Then he unfolds the chain: education, science, patient capital, open markets, strategic state. On a slide, a curve: CO₂ emissions against GDP. He summarizes the idea in essence: decarbonization will come through truly Schumpeterian innovations. The logic is clear: encourage the creation that substitutes clean processes for carbon technologies. Moreover, organizing the transition to limit the losers is essential. Finally, this helps avoid a political backlash.
"Clock Interruption": What Aghion Proposes
The pension reform adopted in 2023 plans for a gradual increase in the legal age to 64 years. The "clock interruption" outlined by Philippe Aghion involves temporarily suspending the increase: age frozen at 62 years and 9 months, until 2027. The mechanism is simple: stop the progression, re-examine after the presidential election, and if no compromise emerges, the clock resumes. Stated objective: reduce political uncertainty, defuse social conflict, preserve the financial credibility of the pension reform in France.
The economist acknowledges a cost for the public accounts, but he argues for a broader calculation. Analysis: a period of uncertainty can increase the financing cost of the country. However, a negotiated pause could, if it lends credibility to the timeline, reduce this risk. He links this sequence to a long-term strategy: preventing the social debate from vampirizing investment in innovation, training, and energy transition, drivers of sustainable growth.
Reactions and Political Implications
In the moment, Aghion’s suggestion fits into a known balance of power: a government seeking a majority, divided oppositions, vigilant unions. On the right, some refuse a step back, on the left, the suspension is deemed insufficient in the face of the demand for a return to 62 years. In the markets, the question is macro-political: does a truce reduce the risk of a parliamentary accident? The arbitration refers to the credibility of a kept schedule, to the ability to define by 2027 a clear agreement on the financing and social justice of pensions.
The 2025 Prize: Why Now?
The 2025 Nobel highlights three ways of thinking about sustainable growth: the history of ideas (Mokyr), the theory of incentives (Aghion-Howitt), and the articulation with concrete policies. The moment is political: in the face of productivity slowdown, geopolitical shocks, and climate. Moreover, the challenge is to restart a cycle of innovative investment. The ecosystem that Mokyr describes, the model that Aghion-Howitt formalize of Schumpeterian growth, help to design strategies where competition, public investment, and well-designed rules support progress.
Trajectories and Influences
Philippe Aghion (born in 1956) teaches at the Collège de France and has long worked at Harvard. He has published, with colleagues, reference works on sustainable growth. Moreover, his work focuses on competition and innovation policies. Peter Howitt (born in 1946), Brown University, has contributed to linking macro and micro in the analysis of firm entry-exit and innovation cycles. Joel Mokyr (born in 1946), Northwestern University, has placed knowledge institutions (academies, scholarly networks, scientific publishing) at the heart of the explanation.
On a cultural level, Aghion claims a heritage of freedom and creativity. In his lectures at the Collège de France, he emphasizes the role of science and universities. Furthermore, he considers them as engines of sustainable growth and ecological transition.
Bridges with Ecology
The climate transition requires reorienting creative destruction: making carbon technologies exit and accelerating the adoption of low-emission solutions. This involves predictable carbon prices and markets allowing the entry of clean actors. Moreover, it requires funds for R&D and the diffusion of innovations. These innovations include energy efficiency, electric grids, and storage. It is the coherence between competition and industrial policy that conditions employment and social acceptability.
A Portrait in Relief of France and Europe
Throughout Aghion’s interventions, a diagnosis: Europe suffers from shallower financial ecosystems, fragmentation of the internal market, and a deficit of agencies capable of steering risky long-term projects. The response is to invest in research and consolidate a market capable of supporting champions. This involves competition and not rents. Moreover, it is necessary to open data to accelerate the uses of AI and biotechnologies.
What a Nobel Changes (or Not)
A Nobel is neither a program nor a mandate. It recognizes knowledge useful to decision-makers. Here, it reminds us that an open and innovative economy requires robust institutions, sustained public and private capex, and a clear social contract. The "clock interruption" is a proposal among others to gain political time. Its viability will depend on a credible schedule and transparent assumptions about the cost. Furthermore, a reform path compatible with competitiveness and justice will be needed.
The Spirit of the Nobel
The portrait of Philippe Aghion is read in the light of a Nobel that places innovation at the center. The Schumpeterian idea is not just a slogan: it offers a grammar for leading the productive and ecological transition. Between lecture halls and platforms, the "clock" of pensions says the same thing: an economy is not managed against its society. It transforms by investing in knowledge and opening its markets. Moreover, it secures its rules so that creation sustainably prevails over destruction.
