Philippe Aghion

Philippe Aghion
Aghion at Boston University in February 2015
Born	Philippe Mario Aghion (1956-08-17) 17 August 1956 Paris, France
Known for	Endogenous growth theory Creative destruction
Mother	Gaby Aghion
Academic background
Alma mater	École normale supérieure de Cachan Paris 1 Panthéon-Sorbonne University (DEA) Harvard University (PhD)
Academic work
Discipline	Innovation Economic growth Organisations Contract theory
School or tradition	Neo-Schumpeterian
Institutions	Collège de France INSEAD London School of Economics Harvard University University College London Nuffield College, Oxford Massachusetts Institute of Technology
Awards	BBVA Foundation Frontiers of Knowledge Award (2019) Nobel Prize in Economic Sciences (2025)

Philippe Mario Aghion FBA (French: [filip aɡjɔ̃]; born 17 August 1956) is a French economist and Nobel Prize winner who is a professor at the Collège de France, at INSEAD, at the London School of Economics, and at the Paris School of Economics.

From 2002 to 2015, he was the Robert C. Waggoner Professor of Economics at Harvard University. Prior to that, he was a professor at University College London (1996–2002), an Official Fellow at Nuffield College, Oxford (1992–1996), and an assistant professor at the Massachusetts Institute of Technology (1987–1989). In 2025, he shared half of the Nobel Memorial Prize in Economic Sciences with Peter Howitt "for the theory of sustained growth through creative destruction".

Early life and education

Philippe Aghion was born in Paris in 1956, to a Jewish family, he is the son of Raymond and Gaby Aghion, a French fashion designer and founder of the French fashion house Chloé, born in Alexandria. She is said to have coined the phrase prêt-à-porter.

Aghion graduated from the mathematics section of the École normale supérieure de Cachan (ENS Cachan), and obtained a diplôme d'études approfondies and a doctorat de troisième cycle (third cycle doctorate) in mathematical economics from the Université Paris I Panthéon-Sorbonne. He received his PhD in economics from Harvard University in 1987.

Career

Aghion began his academic career in 1987 when he joined the Massachusetts Institute of Technology as an Assistant Professor. In 1990, he was appointed Deputy Chief Economist of the European Bank for Reconstruction and Development (EBRD) before moving to the Nuffield College, Oxford and then University College London in 1996. In 2002, he returned to Harvard where he became the Robert C. Waggoner Professor in Economics, a chair he held until 2015 when he was named Centennial Professor of Economics at the London School of Economics (LSE).

His research focuses on economic growth and innovation. With Peter Howitt, he developed the Schumpeterian paradigm, and extended the paradigm in several directions; much of the resulting work is summarized in his book titled Endogenous Growth Theory, co-authored with Howitt, and more recently in The Power of Creative Destruction.

He is a member of the American Academy of Arts and Sciences, and was elected a Corresponding Fellow of the British Academy in 2015. He was president of the European Economic Association in 2017. He has been an editor of the Annual Review of Economics since 2018.

Research work

His early work, in the late 1980s, focused on contract theory and corporate finance, particularly with Patrick Bolton and Oliver Hart. In 1992, together with Peter Howitt, he proposed a foundational endogenous growth theory model using the Schumpeterian framework of creative destruction. This publication paved the way for a large strand of theoretical and empirical literature on the determinants and policies of growth. In the 2000s, this led him to explore the links between competition, institutions, and growth, in particular the inverted-U relationship between competition intensity and innovation. In the 2010s, his research expanded to issues of inequality, social mobility, and the political economy of innovation. His most recent work addresses the effects of automation, artificial intelligence, globalization, as well as green growth.

Aghion-Howitt 1992 and the paradox of creative destruction

According to Ufuk Akcigit, the framework developed by Philippe Aghion and Peter Howitt in their 1992 article revolutionized the analysis of endogenous growth dynamics by allowing back-and-forth between theory and firm-level data, which explains the success of the model in the economic literature. Their approach is characterized by the introduction of the Schumpeterian mechanism of creative destruction, whereby innovations make old technologies obsolete (the business stealing effect), governing the creation and failure of firms. Innovation effort is a response to firms' search for rents. In respect to the decision-making behaviour of business executives, these rents act as a carrot and creative destruction as a stick; however, when rents become too large, they create barriers to entry for new firms. At the same time, the incentive to innovate disappears, leading to slower growth when there is no longer a stick and the carrot is already secured. The consideration of firm heterogeneity is central to this paradox, allowing for the study of growth dynamics depending on whether firms are large or small, incumbents or entrants, frontier innovators or imitators.

Step-by-step innovation and escape from competition

The 1992 Aghion-Howitt paper assumes that innovation takes place through leapfrogging: an innovator necessarily overtakes the leader once it innovates. Later papers, however, introduced the canonical mechanism of step-by-step innovation, in which innovation occurs incrementally along a ladder: it is thus possible to catch up with the leader without necessarily surpassing it. The distance of firms to the technological frontier, measured by the number of steps required to reach the leader (neck-and-neck competition), makes it possible to quantify the degree of competition in the economy. This competition acts as a catalyst for innovation as the distance narrows, since leading firms want to preserve their rents—this is the escape-competition effect. However, laggard firms may be discouraged, which underscores the importance of taking into account the composition of an economy when assessing its performance.

The "Middle-Income Trap"

Philippe Aghion has also contributed to the analysis of the "middle-income trap," which refers to the difficulty faced by some emerging economies in reaching the level of advanced economies. According to him, growth driven by capital accumulation and technological imitation first allows rapid catch-up but reaches its limits when countries approach the technological frontier. To sustain their trajectory, they must then reorient their institutions and policies toward frontier innovation, as illustrated by Argentina's failure in the twentieth century or, conversely, South Korea's temporary success following the 1997 Asian crisis. In these situations, the vested interests of dominant firms often hinder reforms that would foster competition, research, and economic openness. Aghion thus highlights the importance of institutional transitions: only the adoption of appropriate policies—higher education, support for basic research, developed financial markets, and effective competition—makes it possible to avoid growth slowdown and cross the threshold from catch-up to innovation.

Inequality, social mobility, and education

Since the 2010s, Philippe Aghion has devoted a substantial part of his research to the links between growth, inequality, and social mobility. His work shows that innovation, the engine of creative destruction, tends to widen income gaps by favoring individuals and firms at the technological frontier. However, such inequalities can be compatible with growth if accompanied by strong social mobility. In this perspective, Aghion emphasizes the central role of education and training: investment in secondary and higher education determines individuals' ability to participate in innovation dynamics and achieve greater intergenerational mobility. He has also studied taxation and public policies, showing that simplifying tax incentives can stimulate entrepreneurship, while well-designed social safety nets encourage risk-taking and innovation. These analyses extend Schumpeterian theory by stressing the importance of educational and redistributive institutions in making growth inclusive and sustainable.

Public positions

During the 2012 French presidential election, he signed the appeal of economists supporting candidate François Hollande because of "the relevance of the proposed options, in particular with regard to the recovery of growth and employment". In 2017, he expressed his support for Emmanuel Macron.

Reports

Aghion Report (2010)

Philippe Aghion led a working group of around ten international experts whose work initially focused on an international comparison of university autonomy, and then on the implementation of campuses of academic excellence (Initiative d'excellence). A two-part report was submitted in January 2010 and July 2010 to the Minister of Higher Education Valérie Pécresse.

This report recommended establishing "balanced governance" in universities. Drawing on the examples of Harvard, MIT, Oxford, or Cambridge, it acknowledged that there is no single governance model.

It proposed the creation of two governing bodies at the head of universities. The first, the board of directors, would be composed mostly of external members, who would appoint a president with extensive powers. The second would be embodied in an "academic senate," a genuine forum for scientific and pedagogical proposals.

Other activities

Aghion was elected a Fellow of the American Academy of Arts and Sciences in 2009 and he is a member of the Executive and Supervisory Committee (ESC) of CERGE-EI. He also serves on the Scientific Advisory Board of the Max Planck Institute for Research on Collective Goods.

Ahead of the 2012 French presidential election, Aghion co-signed an appeal of several economists in support of candidate François Hollande.

In 2016, Aghion was appointed by United Nations Secretary-General Ban Ki-moon to an expert group advising the High-Level Commission on Health Employment and Economic Growth, which was co-chaired by presidents François Hollande of France and Jacob Zuma of South Africa. In 2021, he was appointed to the World Bank–International Monetary Fund High-Level Advisory Group (HLAG) on Sustainable and Inclusive Recovery and Growth, co-chaired by Mari Pangestu, Ceyla Pazarbasioglu, and Nicholas Stern.

Additional advisory activities include:

• Center for Economic Research and Graduate Education – Economics Institute (CERGE-EI), Member of the Board of Trustees
• Centre de Recerca en Economia Internacional (CREI), Pompeu Fabra University (UPF), Member of the Advisory Board

Honours and awards

Honours

• Knight of the Legion of Honour (2012)
• Officer of the Ordre national du Mérite (2018)

Awards

In 2019, Aghion and Peter Howitt received the BBVA Foundation Frontiers of Knowledge Award in Economics. He and Howitt were also awarded half of the Nobel Memorial Prize in Economic Sciences in 2025 "for the theory of sustained growth through creative destruction", the other half going to Joel Mokyr.

Books

• Aghion, Philippe; Antonin, Celine; Bunel, Simon (2021): The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations. Harvard University Press. ISBN 978-0-674-97116-5.
• Aghion, Philippe; Howitt, Peter (2009); The Economics of Growth. MIT Press. ISBN 978-0-262-01263-8
• Aghion, Philippe; Griffith, Rachel (2006). Competition and Growth. MIT Press. ISBN 978-0-262-01218-8
• Aghion, Philippe; Durlauf, Steven N. (2005). Handbook of economic growth. 1A. Amsterdam: Elsevier. ISBN 978-0-444-52041-8.
• Aghion, Philippe; Durlauf, Steven N. (2005). Handbook of economic growth. 1B. Amsterdam: Elsevier. ISBN 978-0-444-52043-2.
• Aghion, Philippe; Howitt, Peter (1998). Endogenous growth theory. Cambridge, Massachusetts: MIT Press. ISBN 978-0-262-01166-2.

See also

• List of Jewish Nobel laureates

External links

• Philippe Aghion on Nobelprize.org

• INSEAD biography page
• The Economics of Creative Destruction, a festschrift symposium in honour of Philippe Aghion and Peter Howitt, organised by Ufuk Agcigit and John Van Reenen, 9–12 June 2021
  • Opening and tribute to Emmanuel Farhi
  • Introduction
  • Creative destruction and the labour market
  • Competition and creative destruction
  • Trade and innovation
  • Growth measurement and growth decline
  • Political economy of creative destruction
  • Growth and the environment
  • Growth meets development
  • Inequality and creative destruction
  • Taxation, regulation and innovation
  • Finance, firm dynamics and growth
  • Organisation of innovation
  • Science and innovation
  • Innovation and growth policy
  • Address by President Emmanuel Macron
  • Concluding remarks