Canadian economist Peter Howitt, a graduate of McGill University, was named one of the three recipients of the Nobel memorial prize in economics, the Royal Swedish Academy of Sciences announced on Oct. 13. He shares the award with Philippe Aghion of the Collège de France and Joel Mokyr of Northwestern University for pioneering work on innovation-driven economic growth, particularly through the concept of “creative destruction.”
“This year’s laureates in economic sciences […] explain how innovation provides the impetus for further progress,” stated the Royal Swedish Academy of Sciences in its official citation. “Technology advances rapidly and affects us all, with new products and production methods replacing old ones in a never-ending cycle. This is the basis for sustained economic growth.”
In addition to the international acclaim, the award comes with a monetary prize and formal honours. Half of the 11 million Swedish kronor (nearly $1.2 million CAD) prize goes to Mokyr, while the other half is shared between Aghion and Howitt. Each laureate also receives an 18-carat gold medal and a diploma, presented during the official Nobel ceremony on December 10, the anniversary of Alfred Nobel’s death.
In a social media post, Prime Minister Mark Carney congratulated Howitt for receiving the “extraordinary recognition.”
“Canada is home to many of the world’s brightest minds. With a lifetime of path-breaking research on how innovation and human ingenuity are essential engines of growth, Peter Howitt’s work is a foremost example of Canadian ideas having global impact,” the Prime Minister wrote on X (formerly Twitter).
Early sparks of curiosity
Peter Howitt’s journey into economics began not in a lecture hall, but in a small wool-importing office in Guelph, Ontario, where he worked part-time during high school. The experience would plant the seeds of a lifelong intellectual pursuit.
“I remember seeing this little teletype machine bringing in wool prices from around the world,” Howitt said in a press conference following the Nobel announcement. “I’d ask: why do these prices keep going up and down? The man I worked for began explaining supply and demand, and I was fascinated.”
Encouraged by his mentor to study economics formally, Howitt enrolled at McGill. In 1968, he completed an honors degree in Economics and Political Science.
“I became even more interested in economics during my undergrad years, especially macroeconomics, which became the focus of most of my research,” he said. “But I never lost sight of that original question I asked at 18: ‘Why do prices go up and down?’ I’ve just remained curious ever since.”
A career shaped by economic inquiry
Following his studies at McGill, he went on to earn a master’s degree at the University of Western Ontario and completed his PhD in Economics at Northwestern University in 1973. His daughter, Katherine Howitt, followed his footsteps, graduating with honours from McGill with a BA in Economics and History in 2004.
Howitt began his academic career teaching at the University of Western Ontario from 1972 to 1996, later holding positions at Ohio State University and finally at Brown University, where he has served as the Lyn Crost Professor of Social Sciences since 2000.
Throughout his career, Howitt has been widely recognized for his intellectual contributions. He is a Fellow of the Royal Society of Canada (1992) and the Econometric Society (1994). He served as president of the Canadian Economics Association from 1993 to 1994 and was editor of the Journal of Money, Credit, and Banking from 1997 to 2000.
The Theory of Creative Destruction
Howitt’s Nobel-recognized research, developed in collaboration with Philippe Aghion, mathematically formalized the process of creative destruction – originally conceptualized by Joseph Schumpeter. In their influential 1992 paper, Aghion and Howitt demonstrated how new technologies and ideas not only boost productivity but also disrupt existing markets, displacing older firms and methods in the process.
“When a new and better product enters the market, the companies selling the older products lose out,” the Nobel announcement explained. “The innovation represents something new and is thus creative. However, it is also destructive, as the company whose technology becomes passé is outcompeted.”
Their models provided a new foundation for understanding sustained economic growth, showing how innovation must be nurtured by competitive markets and protected by institutions that allow for dynamism and change.
“The laureates’ work shows that economic growth cannot be taken for granted,” said John Hassler, Chair of the Nobel committee. “We must uphold the mechanisms that underly creative destruction, so that we do not fall back into stagnation.”
A Canadian legacy with global impact
Howitt’s work is not only theoretical but has shaped real-world economic policy. His research has informed strategies on R&D investment, education policy, startup support and market competition – all critical components of knowledge-based economies.
At 79, Howitt’s achievements represent a major milestone for Canadian academia. His Nobel Prize highlights the global influence of Canadian economics, and of McGill University, where his journey began.