Work

Over the last two centuries, the world has seen sustained economic growth. However, this was not always the case. In fact it was quite the opposite – in the past there was often stagnation. Philippe Aghion and Peter Howitt studied the mechanisms behind sustained growth. In 1992, they presented a mathematical model for what is called creative destruction: when a new and better product enters the market, the companies selling the older products lose out. Creative destruction creates conflicts that must be managed in a constructive manner so that innovation will not be blocked.