Brown University economics professor Peter Howitt wins Nobel Economics Prize
Brown University
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| The Royal Swedish Academy of Sciences has awarded Brown University Professor Emeritus Peter Howitt the Nobel Prize in Economic Sciences “for the theory of sustained growth through creative destruction.” |
Howitt is a professor emeritus of economics at Brown, where he joined the faculty in 2000. He shares one half of the Nobel Prize with Philippe Aghion of the Collège de France and INSEAD in Paris and the London School of Economics and Political Science in the United Kingdom; the other half was awarded to Joel Mokyr of Northwestern University.
“Over the last two centuries, for the first time in history,
the world has seen sustained economic growth,” the Royal Swedish Academy of
Sciences stated in its news release. “This has lifted vast numbers of people
out of poverty and laid the foundation of our prosperity. This year’s laureates
in economic sciences, Joel Mokyr, Philippe Aghion and Peter Howitt, explain how
innovation provides the impetus for further progress.”
Brown University President Christina H. Paxson congratulated Howitt for being recognized with the world’s highest prize for economics.
“We are proud and deeply honored that the work of Professor
Howitt, one of our esteemed faculty, has received the international recognition
of a Nobel Prize,” Paxson said. “At a time when the role of research in
sparking innovation in new technologies is so prominent in discussions about
our changing society, I’m sure that people around the world will appreciate
learning more about Professor Howitt’s work, along with the contributions of
the other prize winners.”
“I didn’t bother to turn my phone on overnight,” Howitt
said. “I have no champagne in the refrigerator. So this is all really quite a
shock to me.”
He first learned of the prize through several calls from a
reporter to his wife's phone.
“Someone had found a way to reach her,” Howitt said. “It was
a number from Sweden. Oh, I said, I think you better answer.”
Howitt and Aghion studied the mechanisms behind sustained growth, specifically the ways in which new technologies can affect growth over time.
“The idea [is] that economic growth is driven by
technological progress,” Howitt said. “Technological progress comes from new
inventions and innovations that open up all sorts of possibility to make us all
more productive, but at the same time as it produces these great benefits for
most of society, it also generates a lot of harm for certain people whose human
capital or physical capital is rendered obsolete by these new ideas.”
In a research article published in 1992, Howitt and Aghion
constructed a mathematical model for what is called creative destruction: when
a new and better product enters the market, the companies selling the older
products lose out. The innovation represents something new and is thus
creative. However, it is also destructive, as the company whose technology
becomes passé is outcompeted.
“In some societies, people who are part of status quo and
very successful based on previous technologies gain political power and
influence, and are able to arrange things so that it’s very difficult for new
technologies to displace them,” Howitt said. “That helps to protect their
interests, but also inhibits economic growth [and] stops new technologies from
being implemented. This is a conflict between new and old that is a central
concept of economic growth. Philippe and I managed to find simple ways to formulate
those ideas mathematically.”
Kareen Rozen, chair of Brown’s Department of Economics,
praised Howitt’s groundbreaking scholarship in innovation and economic growth
and his many contributions to teaching and research at Brown.
“The Department of Economics is delighted with the wonderful
news that Peter Howitt has been recognized with the Nobel economics prize,”
Rozen said. “Peter was prolific at Brown, with over 40 articles published since
he joined, as well as his illustrious 2009 book ‘The Economics of Growth,’
which synthesized his prize-winning work.”
In addition to his contributions as a member of a
world-class group of economics scholars at Brown, Rozen celebrated Howitt’s
accomplished legacy as an adviser and teacher.
“He was deeply committed to graduate education at Brown, and
before his retirement in 2013, Peter was a beloved and productive adviser who
coauthored articles with multiple graduate students,” Rozen said. “Even after
his retirement, Peter continued to teach in the graduate program. Brown’s
Department of Economics is proud to have an intellectual environment that
attracted and fostered the work of such a creative scholar as Peter.”
The Royal Swedish Academy of Sciences said that in different
ways, the laureates show how creative destruction creates conflicts that must
be managed in a constructive manner. Otherwise, innovation will be blocked by
established companies and interest groups that risk being put at a
disadvantage.
“The laureates’ work shows that economic growth cannot be
taken for granted,” says John Hassler, chair of the committee for the prize in
economic sciences. “We must uphold the mechanisms that [underlie] creative
destruction, so that we do not fall back into stagnation.”
Howitt, who was born in Canada, earned a bachelor’s degree
in economics at McGill University in 1968, and a master’s in economics the
following year at the University of Western Ontario, before moving to the
United States to complete a Ph.D. at Northwestern University. From 1972 to 1996
he taught at the University of Western Ontario, combining his work there with
visiting positions at Laval University in Quebec, as well as in France, at
Paris and Toulouse universities, and in the U.S. at the Massachusetts Institute
of Technology. In 1996, Howitt moved to Ohio State University, before joining
the faculty at Brown University in 2000. He has held editorial positions with
many leading economics journals and been granted multiple honorary doctorates.
