“We were building on the framework that Schumpeter created. Their approach is elaborated in the book “Endogenous Growth Theory” (1998, M.I.T. With his co-author Peter Howitt from Brown University, Aghion has used his Schumpeterian growth model to fit the far more complex and high-powered economy of today in which technological innovation and globalization have accelerated the process Schumpeter first identified. Thus by creating something new, successful innovators destroy the profits that motivated their predecessors.īy focusing explicitly on innovations as a main source of economic growth, this approach opens the door to a deeper understanding of how organizations, markets, trade, competition policy, the financial system, property rights, and the legal framework, both affect and are affected by growth by motivating entrepreneurs to engage in innovative activities. According to Schumpeter, entrepreneurs are constantly looking for new ideas that will render their rivals’ ideas obsolete. ![]() He has reintroduced into growth theory the concept of “creative destruction,” first formulated by economist Joseph Schumpeter (1883-1950). He will be a great addition to the department.”Īghion focuses much of his attention on the relationship between economic growth and institutions. “He is a world leader in applied theory, having done pioneering work in both contract theory and growth theory. Furer Professor of Economics and chair of the Economics Department. “We are delighted and excited about the appointment of Philippe Aghion,” said Oliver Hart, the Andrew E. He was appointed July 2000 to a tenured position in the Economics Department in the Faculty of Arts and Sciences. At the age of 44, Aghion is one of the most prolific and influential economists of his generation. ![]() But the obstacles he has encountered have not dampened his enthusiasm or sapped his energy. What progress has Aghion made toward realizing those early ambitions? “Well, it is very slow,” he admitted. ![]() The path he chose to achieve this end was economics, the science of allocating scarce resources to meet human needs. It’s not an easy balance to strike.” (Staff photo by Jon Chase)Īs an idealistic young student in Paris, Philippe Aghion dreamed of making the world a better place, of reducing inequality and environmental damage, and of taking better advantage of technological progress to reduce poverty and illiteracy and increase social well-being. Economist Philippe Aghion is interested in the most effective ways to foster innovation without each new generation of entrepreneurs destroying the preceding one: “You want patent protection, but you also want anti-trust laws – both are important.
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