Public Policy
Hansen excelled at both scholarly works and popular expositions that helped people understand economic cycles and deficit spending. He trained and influenced hundreds of students, many of whom later held important government posts, and he served on numerous governmental committees dealing with economic issues. The American Economic Association awarded him its Walker Medal in 1967.
Hansen frequently testified before Congress. He advocated against using unemployment to control inflation. He thought that price inflation could be managed by timely changes in tax rates and money supply (Functional finance), and by effective wage and price controls. He also advocated fiscal and other stimulus to ward off the stagnation that he thought was endemic to mature industrialized economies.
During the Roosevelt and Truman presidencies Hansen was influential in shaping policy. He served on government commissions and as consultant to the Federal Reserve Board, the United States Department of the Treasury and the National Resources Planning Board. In 1935, he helped create the U.S. social security system and, in 1946, he assisted in the drafting of the Full Employment Act which, among other things, created the Council of Economic Advisors. Between 1939 and 1945 he served as co-rapporteur to the economic and financial group of the Council on Foreign Relations' War and Peace Studies project, along with Chicago economist Jacob Viner.
Hansen's advocacy (with Luther Gulick) during World War II of Keynesian policies to promote post-war full employment helped persuade Keynes to help develop plans for the international economy that emphasized free trade.
Hansen's 1953 book, A Guide to Keynes, (like Paul Samuelson's textbook Economics) promoted Keynesian economics in America and in many other countries after World War II.
Hansen was elected Vice President of the American Statistical Association and President of the American Economic Association.
He died June 6, 1975 in Alexandria, Virginia.
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