Upon completion of the dissertation in 1918 (published in 1921), he moved back west to the University of Minnesota in 1919, where he rose quickly through the ranks of a full teacher in 1923.

His Economic Stabilization in an Unbalanced World (1932), written with the help of a Guggenheim grant that funded travel in Europe during 1928–1929, established Hansen in the broader circle of public affairs.

Later, his America's Role in the World Economy (1945) and Economic Policy and Full Employment (1947) made this case to a wider public.

After retiring from active teaching in 1956, he wrote The American Economy (1957), Economic Issues of the 1960s and Problems (1964), and The Dollar and the International Monetary System (1965).

based in Keynes's General Theory, presents his thesis for both growth and employment being stagnant if there is no economic state intervention to stimulate demand.

Hansen presented evidence on several occasions before the U.S. Congress to oppose the use of unemployment as the main means of fighting inflation.

[5] Hansen, in his review of The General Theory of Employment, Interest and Money, was skeptical of John Maynard Keynes's propositions, but by December 1938, in his presidential address to the American Economic Association, he embraced Keynesian theories of the need for government intervention in periods of economic recession.

Hansen's 1941 book, Fiscal Policy and Business Cycles, was the first major work in the United States to entirely support Keynes's analysis of the causes of the Great Depression.

[8] Hansen argued that the American economy during the Great Depression was not going through a particularly severe business cycle but through the exhaustion of a longer-term progressive dynamic.

What Hansen had in mind was not just counter-cyclical public spending to stabilize employment but rather major projects such as rural electrification, slum clearance, and natural resource development conservation, all with a view of opening up new investment opportunities for the private sector and so, restoring the economic dynamism needed to the system as a whole.

He argued that inflation could be managed by timely changes in tax rates and the money supply, and by effective wage and price controls.

Between 1939 and 1945, he served as co-rapporteur to the economic and financial group of the Council on Foreign Relations's War and Peace Studies project, along with Chicago economist Jacob Viner.

[11] Hansen's advocacy (with Luther Gulick) during World War II of Keynesian policies to promote post-war full employment helped persuade Keynes to assist in the development of plans for the international economy.