A Nobel Prize for the Economics of Progress

This year’s Nobel Prize for economics is unusually pertinent. It honors three scholars who, in different ways, have tried to understand why innovation happens and how it promotes economic growth. These questions have never seemed more pressing.

Technological progress shows no sign of stalling. Quite the opposite: Artificial intelligence promises a new surge of “creative destruction,” meaning higher living standards combined with upheaval in the labor market. Making the most of this prospect is challenging in its own right, but it also exemplifies a deeper puzzle. In recent years, advancing knowledge, new goods and services, and new forms of production have arrived alongside sluggish growth in productivity.