In the late 1930s Hansen argued that "secular stagnation" had set in, so that the American economy would never grow rapidly again, because all the growth ingredients had played out, including technological innovation and population growth. The only solution, he argued, was constant, large-scale deficit spending by the federal government. The thesis was highly controversial, as critics, such as George Terborgh, attacked Hansen as a pessimist and defeatist. Hansen replied that secular stagnation was just another name for Keynes's underemployment equilibrium. However, the sustained economic growth beginning in 1940 undercut Hansen's predictions and his stagnation model was forgotten.
Read more about this topic: Alvin Hansen
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Stagnation may refer to one of the following
- Economic stagnation, slow or no economic growth
- Era of Stagnation, a period of economic stagnation in Soviet Union
- Stagnation in fluid dynamics, see "Stagnation point"
- Water stagnation
- Air stagnation
- The title of a song on Genesis' album Trespass
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