It will take another crisis for governments to step up to the spending plate | Larry Elliott

But as Keynes has shown, loose monetary policy is not the only way to respond to stagnation

Alvin Hansen's timing could hardly have been worse. In early 1939, almost a decade after the Wall Street crash and six months before Hitler invaded Poland, he said America's best years were behind it. An ageing population, fewer migrants and the exhaustion of existing technologies meant there would never be complete recovery from the Great Depression. Instead, the US was stuck in what Hansen called secular stagnation, in which secular means persistent or long term.

The second world war meant the idea of secular stagnation was a five-minute wonder. Demand soared as the US government geared up to fight on two fronts, and strong growth persisted for a quarter of a century after the war ended. Many of the technological innovations of the late 19th and early 20th century - the car, for example - only came into their own in the US post-1945 when family incomes rose and the interstate highway network was built.