A Western graduate and honorary professor has been awarded the world's top prize for economics in recognition of his work on creative destruction, a theory that describes how innovation fuels economic growth through the rise of new industries and the decline of outdated ones.
Peter Howitt, MA 69 (Economics), who was a faculty member at Western for nearly 25 years and remains an honorary professor, is among a trio of winners of the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, often known as the Nobel Prize in Economics.
He won the prestigious prize alongside Joel Mokyr and Philippe Aghion, a longtime associate, for their work in explaining innovation-driven economic growth.
Howitt told reporters it was the "dream of a lifetime."
Western President Alan Shepard said it was a proud moment for the university community and its network of alumni.
"We are thrilled to celebrate Peter Howitt receiving the Nobel Prize in Economics. His pioneering work has transformed how we think about innovation and economic growth. Much of his work as an economist was conducted at Western," Shepard said.
"Peter was a professor of economics at Western from 1972 to 1996 and continues to hold an honorary professorship. His Nobel win is a powerful reflection of the excellence of Western's storied economics department, which consistently ranks among the best in the world. This is a proud moment for Western."
Howitt's creative destruction work the backbone'
Howitt was awarded the Nobel Prize for his work in creative destruction theory, which describes how innovation drives economic growth, improving living standards by replacing outdated technologies while disrupting existing industries and jobs.
"Economic stagnation, not growth, has been the norm for most of human history. Their work shows that we must be aware of, and counteract, threats to continued growth," the Royal Swedish Academy of Sciences, which awards the prize, said of the laureates in a statement.
In a virtual press conference held by Brown University, where Howitt is a professor emeritus, he discussed his Canadian roots and the influence of Canada on his career. He described Western's economics department as a lively, collaborative environment, full of scholars eager to share ideas, comment on each other's papers and organize conferences. He credits the experience at Western with shaping him into a productive economist.
"Working in Canada was where I really cut my teeth as an economist. The atmosphere at Western University was the one that really taught me how to be a productive scholar and I'm forever grateful for that."
Audra Bowlus, a Western economics professor and former colleague of Howitt, said the entire department is celebrating his well-deserved win.
"We saw this coming. He may be surprised, but we all knew," she said of Howitt's intelligence and impact on the field. "We are all just over the moon."
It was Bowlus who named Howitt an honorary professor in 2015, when she was chair of the economics department. Howitt's work to help understand creative destruction - and how it can be supported and encouraged - is foundational and essential, Bowlus said.
"Growth and productivity are the economic engine - that's where our living standards come from, where our wealth comes from. Understanding the forces behind that is tantamount to making progress and making life better," she said.
"His contributions in terms of how that process unfolds, how we can understand it, how important it is and then how policy makers can support it - that's the backbone."
Moulding minds at Western
Bowlus recalled Howitt as a kind and welcoming colleague and teacher.
"You're always very nervous as a new person arriving - I didn't know anyone at Western, or in Canada for that matter - and he was just lovely. Very kind and very helpful. I was a labour economist, so not in his field, but he was just so helpful to everybody."
Governor of the Bank of Canada, Tiff Macklem, MA'84, PhD'89, reflected on Howitt's talent as a teacher in an interview with CBC. Macklem was a student in one of Howitt's classes at Western in 1984.
"I can still remember a few aha' moments in his classes where, because of his explanation, I could understand something that the day before seemed impenetrable," Macklem said.
Howitt is a distinguished Canadian economist who was elected a Fellow of the Royal Society of Canada in 1992. He earned his master's degree from Western and his PhD from Northwestern University. Howitt taught generations of economists at Western between 1972 and 1996, while also holding visiting positions at the University of Paris, the University of Toulouse and the Massachusetts Institute of Technology (MIT), before moving to Ohio State University in 1996. From there, he joined Brown University in 2000 and retired in 2013.
The publication recognized by the Nobel committee, in which Aghion and Howitt developed a mathematical model for creative destruction, was written during Howitt's time at Western.
Bowlus noted it's been cited more than 17,000 times.
"It's a great day for Western and Western economics. These prizes are awarded to people at the top schools in the world. When you can grow people with these achievements, that really says something about your department and the atmosphere you're creating," she said.
"That's the environment we strive to create for our young people. That's what it's all about."
