In the late 1930s, Hansen argued that "secular stagnation" had set in so the American economy would never grow rapidly again because all the growth ingredients had played out, including technological innovation and population growth.
I slutningen af 30'erne argumenterede Hansen for, at en "permanent stagnation" var begyndt, sådan at den amerikanske økonomi aldrig ville vokse hurtigt igen, fordi forudsætningerne for væksten havde udspillet sig selv, heriblandt teknologisk innovation og befolkningsvækst.