Mapping the themes: How Economics Nobel Prize moves with the times

Joel Mokyr, Philippe Aghion, Peter Howitt win 2025 Nobel Prize in Economics

The Nobel prize in economics, which has gone to Joel Mokyr, Philippe Aghion, and Peter Howitt for explaining “innovation-driven economic growth”, is the latest in an established trend: Recognition of work reflecting current themes. 

With crypto, semiconductors and artificial intelligence becoming key determinants of economic growth for companies, sparking a race among nations to tap into their benefits, it was only a matter of time before the economics Nobel honoured economists who provide a theoretical understanding of these forces. 

Here is a snapshot of other awardees whose research studies have enriched the world’s understanding of current economic and financial developments: 

 

Last year the prize went to Daron Acemoglu, Simon Johnson, and James Robinson, “for studies of how institutions are formed and affect prosperity”. This was the year global attacks on democratic institutions peaked. Strident comments by

then Presidential candidate Donald Trump on the US judiciary and disputes closer home over the role of the Election Commission were stark examples. There was criticism of the work of the Nobel troika, especially over whether they got the reasoning right, with critics pointing out that institutions followed prosperity rather than the other way round. But all agreed that institutions mattered in democracies.

  The winner in 2023, Claudia Goldin, was another apt choice for the time. Her award, the citation read, was “for having advanced our understanding of women’s labour market outcomes”. The subject was particularly relevant as nations emerged from the pandemic, which had affected work outcomes for women more than men. 

The 2022 prize to Ben Bernanke, Douglas Diamond and Philip Dybvig, for their “research on banks and financial crises”, was as apt as it could get. In 2022, the pandemic continued to rock the world. Beyond medicine, the impact on the financial market was the most severe. Global markets were roiled just as they were recovering from the decade-long impact of the global financial meltdown. The covid shock and Russia’s invasion of Ukraine sent asset prices tumbling, and created a global supply shock.

 

Briefly, this trend of topicality looked to have been interrupted in 2021. David Card got the prize “for his empirical contributions to labour economics” while Joshua D Angrist and Guido W Imbens were honoured “for their methodological contributions to the analysis of causal relationships”.  The prize was recognising seminal research, in both cases, going beyond immediate impact.  However, Card’s work, showing migration does not send local wages plummeting and minimum wages do not harm job creation, could be policy bombs today. Angrist and Imbens’ research on school education was timely with the world debating the economic impact of lost school-years due to the pandemic. 

After the first flush of awards in the Seventies and Eighties, when the Nobel committee raced to honour the leading lights among  economists, the focus clearly shifted to contemporary themes. 

The 2020 prize went to Paul R Milgrom and Robert B Wilson, “for improvements to auction theory and inventions of new auction formats”. The context of the mineral race in Africa and South America for rare earths and critical minerals in the transition from fossil fuels had made their studies most pertinent. 

There is absolutely no doubt that Abhijit Banerjee, Esther Duflo, and Michael Kramer were on the money with their research that won the prize in 2019. The citation said the prize was “for their experimental approach to alleviating global poverty”, a challenge the world was grappling with. Thomas Piketty, another contender for the prize, had already pushed the debate on global inequality centre-stage with his book, Capitalism in the Twenty-First Century, published in 2013. It was impossible to deflect the question as the winning trio offered a means to measure the effectiveness of policy interventions, through randomised controlled trials (RCT). 

Just as RCT was new in economics, so were the research areas honoured in the 2018 Nobel. William Nordhaus was rewarded “for integrating climate change into long-run macroeconomic analysis”, and Paul Romer “for integrating technological innovations into long-run macroeconomic analysis”. Romer’s work put the academic spotlight on Big Tech and the challenge of network economics. 

This was also the decade when behavioural economics finally became mainstream. How, for instance, does an urban planner persuade commuters to use public transport rather than cars? Richard H Thaler provided some of the answers with his Nudge Economics. The 2017 citation commended “his contributions to behavioural economics”. 

If one takes the bunch of awards from 2010 to 2014, the years just after the financial meltdown, each of them shows a one-to-one connection with the current macro-economic challenges that developed as the markets melted. Each citation mentioned the markets. 

It would not be until 2015 that the Nobel focus shifted from capital to labour. The signature of the change came in the recognition of the work of Angus Deaton, the prize citing “his analysis of consumption, poverty, and welfare”.