The WEALTH Navigator published the Evgeny Goryunov’s, Head of Monetary Policy Department at the Gaidar Institute, author column “Model it.” In this article, the expert explored how the Nobel Prize-winning models of abstract economic models work and why they are important for real-world policy and investment.
The author explained that modern economics creates "imaginary worlds" populated by economic agents to understand the laws of the real world. However, the value of this theory is demonstrated by its ability to change practice. "A good theory can change the world, practice and policy," noted Evgeniy Goryunov, citing the example of the Black-Scholes-Merton options pricing formula, which transformed the options market.
In his column, the expert focused on the "creative destruction" theory of 2025 Nobel laureates Philippe Aghion and Peter Howitt. Their model explains how innovation and growth emerge in the "gap," where competition is sufficient to threaten the leader but not excessive. "This theory allows us to explain the ambiguous dependance between competition and innovation across industries," the expert explained.
The author concludes that policy demands a delicate balance. To stimulate development, innovation must be encouraged (for example, through patents), but abuse of power must be prevented, blocking the next round of "creative destruction."
The full text of Evgeniy Goryunov's column is available at this link: WEALTH Navigator – Model it.