Nobel Prize Laureate Phillippe Aghion gave a lecture at Ekonomikum

Phillippe Aghion, on of this year's recipients of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, recieved the prize “for the theory of sustainable growth through creative destruction.” In his lecture, Aghion spoke, among other things, about the importance of daring to fail, stating that without his failures he would not be where he is today.

Erik Öberg, Docent and Senior Lecturer at the Department of Economics, delivered the introduction to Agion’s lecture. Below you can read the introduction in its entirety.

Introduction of Phillippe Aghion

I am Erik Öberg, with the faculty of economics here at Uppsala University, and the honor to introduce the man of the hour has been bestowed on me.

Earlier this week, Professor Philippe Aghion received the Sveriges Riksbank Prize in Economic Sciences in the Memory of Alfred Nobel for “the theory of sustained growth through creative destruction”.

Of the many achievements of mankind, the transition from everlasting poverty to sustained growth is certainly one of the greatest. And how to preserve this regime of sustained growth is arguably one of most pressing questions for economic policy today.

We know that sustained growth must ultimately come from technological innovation — a lesson highlighted by previous Nobel laureates such as Solow and Romer. But where does innovation actually come from? How is it generated, sustained, and diffused? And what kinds of institutions and policies allow societies to renew their technological frontier again and again?

In organizing our thoughts around these questions, Philippe’s contribution to economics has been transformative. Together with Peter Howitt, he presented his >Schumpeterian framework< of economic growth, which gave us a coherent way to think about the forces that that shape the rate of innovation.

The distinctive features of this framework are first, that it places the innovator — the entrepreneur — at the center stage. The second is that it highlights that innovation is simultaneously a creative and a destructive process, naturally marked by a conflict between the old, who is threatened to be replaced by the new. By turning the light to the agents of innovation, and the competitive environment in which they live, the framework enables us to study the incentives, frictions, and institutional conditions that affect innovation behavior.

This theoretical framework has proven to be remarkably powerful for understanding the process of economic growth. And perhaps most importantly, it provided a unifying structure for the vast empirical literature on the causes to innovation and growth that followed: linking both microeconomic and macroeconomic research on competition, education, finance, industrial policy, and more.

Before closing, let me add a more personal note. Philippe has an energy and a passion for economic research that is contagious — anyone who has been in the same room with him knows what I mean. But Philippe doesn’t only care for economics, but also for economists, especially young economists, and he has helped numerous people build their careers all around the world.

I experienced this myself as a graduate student at Stockholm University and MIT. You, Philippe, were a visiting professor there at the time, and without being in any way expected to do so, you took us out to lunch, offered meetings, participated in our student seminars, and you would occasionally just walk up and down the student corridor, pop your head into our offices, and start asking "what are you working on now?’’ and "what does that curve on the screen there mean?"

By doing so, you just provided us with confidence and some of the fuel needed to help me and my peers to believe in our own line of research. Upon receiving the news that Philippe would earn the Nobel, I talked to many of friends from graduate school about this, and we all found such joy in the memory of this experience. Thank you, Philippe, for making economics fun and inspiring.

Philippe earned his doctorate from Harvard at 1987, and he currently holds positions at College de France, INSEAD and the London School of Economics.