News

Last Wednesday, the Department of Economics hosted a special breakfast to celebrate Philippe Aghion’s Nobel Prize in Economics. Staff, faculty, and PhD students gathered in SAL to warmly welcome Philippe back to the Department for the first time since receiving the award and to mark this outstanding achievement together.

The event began with  a series of congratulatory speeches. LSE President and Vice Chancellor, Larry Kramer, opened the celebration, highlighting Philippe’s remarkable contributions to economic thought and his long-standing connection to LSE. He was followed by Ricardo Reis, John Van Reenen, and Head of Department Ronny Razin, who each shared personal reflections and tributes to Philippe’s influential work and his impact on the academic community.

It was a joyful and inspiring occasion, and a fitting moment to recognise Philippe’s exceptional achievement and the pride it brings to our Department.

To read more about Philippe Aghion’s Nobel Prize in Economics, visit the LSE News article

October 2025

Clare Balboni has been awarded prestigious Philip Leverhulme Prizes 2025 by the Leverhulme Trust.

The prizes recognise and celebrate the achievements of outstanding researchers whose work has already attracted international recognition and whose future careers are exceptionally promising.

Each of the prize winners receives £100,000 which can be used to advance their research.

Chosen from over 350 nominations, the Trust offered five prizes in each of the following subject areas: Archaeology, Chemistry, Economics, Engineering, Geography, and Languages and Literatures.

Commenting on her award in the Economics category, Clare said: “I am delighted and honoured to have been awarded a Philip Leverhulme Prize by the Leverhulme Trust. This award will support my research at the intersection of environmental economics, trade and development economics, focusing on the management of local and global environmental externalities from growth in developing countries.”

More information about the 2025 prize winners is available from the Leverhulme Trust.

October 2025

Professor Philippe Aghion from the Department of Economics and the Centre for Economic Performance (CEP) at LSE has today (13 October) been awarded the Nobel Prize in Economic Sciences.

Professor Aghion was awarded the prize jointly with Joel Mokyr from Northwestern University and Peter Howitt from Brown University “for having explained innovation-driven economic growth”.

Also based at the College de France and INSEAD, Professor Philippe Aghion’s research focuses on the economics of growth.

With Peter Howitt, he studied the mechanisms behind sustained growth. In an article from 1992, they constructed 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. The innovation represents something new and is thus creative. However, it is also destructive, as the company whose technology becomes passé is outcompeted.

In March 2020, he shared the BBVA “Frontier of Knowledge Award” with Peter Howitt for “developing an economic growth theory based on the innovation that emerges from the process of creative destruction.”

Commenting, Professor Larry Kramer, President and Vice Chancellor of the London School of Economics and Political Science said: "With the whole LSE community, I’m absolutely thrilled to congratulate Philippe Aghion on winning the 2025 Nobel Prize in Economic Sciences. Professor Aghion's groundbreaking work on innovation-driven growth has profoundly shaped our understanding of how economies evolve and thrive. This award represents much deserved recognition of Professor Aghion's brilliant scholarship and the lasting impact his ideas have had on economic policy and thought around the world."

Professor Ronny Razin, Head of the Department of Economics at the London School of Economics and Political Science said: “Professor Aghion’s pioneering work on innovation, growth, and the dynamics of capitalism has transformed modern economic thinking and profoundly influenced both academic research and public policy.

“His scholarship has deepened our understanding of how innovation drives productivity and how institutions and policy frameworks shape the process of creative destruction.

“We are immensely proud to count Professor Aghion among our colleagues. His presence enriches our research community and inspires our students and faculty alike. This recognition underscores LSE’s long tradition of world-leading research and our enduring commitment to understanding and improving the world through the study of economics.

“On behalf of all colleagues in the LSE Department of Economics, I extend our warmest congratulations to Philippe on this richly deserved honour.”

October 2025

European Research Council (ERC) Starting Grants have been awarded to Department of Economics Assistant Professors Clare Balboni and Isabela Manelici.

They have been awarded the prestigious grants which aim to help researchers at the beginning of their careers to launch their own projects, build research teams and pursue their most promising ideas.

With a total funding of €761 million awarded to 478 early-career researchers across Europe, ERC Starting Grants are highly sought-after and are estimated to create up to 3,000 jobs within the teams of the new grantees.

Assistant Professor Clare Balboni of the Department of Economics and STICERD will receive her award for her project: Managing local and global externalities from growth.

Assistant Professor Balboni said: “I am delighted and hugely grateful to have received this support from the ERC to advance a research agenda focused on how developing countries can manage the consequences of the externalities associated with their growth. In order to balance the benefits of growth and its attendant externalities, there is a vital need for progress in accurate measurement of these externalities, analysis of how they affect economic decision-making and outcomes, and feeding these estimates into policy design. These aims will be at the centre of the research supported by this grant, which I am very excited to take forward.”

Project summary: The burden of local and global externalities from growth - such as pollution, congestion and climate change - falls mainly on the poorest across and within countries. This research agenda aims to inform the key question of how developing countries can manage the consequences of the local and global externalities associated with their growth. It will offer novel insights into the magnitude and distribution of these externalities in low-income countries, and the design of policies that balance the dual imperatives of shielding vulnerable populations and continued growth. A first theme will consider how local externalities alter assessments of the aggregate and distributional impacts of trade facilitation, which is key for the design of transport and trade policies. The second theme studies how vulnerable populations respond to the global externalities from climate change and how policy can support these adaptive adjustments.

Assistant Professor Isabela Manelici of the Department of Economics and Centre for Economic Performance will receive her award for her project: Can Multinational Linkages Be Leveraged for Development (LINK4DEV)?

Assistant Professor Manelici said: “I am excited about this opportunity to pursue a frontier research agenda aimed at closing critical knowledge gaps on the potential and risks of multinational linkages for development.”

Project summary: Less developed countries compete to attract multinational corporations (MNCs), often seen as growth engines. Meanwhile, domestic firms, workers, and consumers express concerns that MNCs may offer weak trickle-down benefits while increasing their vulnerability to global shocks. This tension is not new: the debate on the trade-offs associated with MNC-led development strategies is long-standing yet unresolved.

LINK4DEV will break new ground in three ways. First, the program will examine the impact of MNCs and their linkages on development through a wide (inside-the-firm) micro to (cross-country) macro lens. Second, it will combine “big data” and causal-inference methods with novel theory. Third, it will partner with governments from four continents, maximizing cross-country learning and impact.

LINK4DEV consists of four interconnected projects. Project 1 will examine whether MNCs foster linkages with local firms or operate in silos, increasing inequality. It will provide a first-time anatomy of MNC linkages in the production networks of four economies at different development stages: Uganda, Costa Rica, Turkey and Belgium. Project 2 will examine whether technology transfers from MNCs to local suppliers are socially optimal in the same four economies. It will then estimate the associated aggregate economic gains and identify policies to increase them. Project 3 will study why MNCs source a large share of inputs globally, focusing on the role of centralized decision-making in MNCs. Attracting MNCs with global sourcing undermines efforts to promote local linkages. This project will merge detailed transaction records from Costa Rica with global supplier and survey data for MNCs. Project 4 will assess how far-reaching the effects of an international trade shock are and how central MNCs are to these effects. It will leverage a cyberattack on Costa Rica’s customs system and a new economy-wide mapping of all firm-to-firm, firm-to-worker, and firm-to-consumer interactions.

Read the ERC’s full press release here.

October 2025