His work established the importance of doing conventional macroeconomics
and microeconomics in underdeveloped countries and set new standards
for development economics, said George Akerlof, a former colleague
of Hansen's in the UC Berkeley economics department who won the 2001
Nobel Prize in economic science. Models resulting from Hansen's studies
were developed for Afghanistan, Bangladesh, India, Thailand and other
Akerlof said Hansen did not avoid careful use of data and hard-to-acquire
sources. "He was not the development economist in the airplane, but
instead the development economist in the archives," Akerlof said. "He
was the greatest development economist of his generation."
In one of his studies, Hansen looked at what Egyptian laborers did
with their spare time, in an effort to dispel the surplus labor argument.
He dug into old records to compute index numbers, measured the rate
of return on the Suez Canal, analyzed Egyptian crop quotas, and co-authored
a book about the
Egyptian economy's performance that looked at implications of exchange
rate regimes and performance of particular industries.
Hansen's first major publication, in 1951, was "A Study in the Theory
of Inflation," in which he showed how there could be a "quasi-equilibrium"
in which wages and prices would both be growing at the same steady-state
rate and wages and prices would behave in basically the same way.
Hansen was a professor of economics at UC Berkeley from 1966 to 1998
and served as chair of the Economics Department from 1977 to 1985.
He also was on the faculty for the campus's Center for Middle Eastern
Studies in the Institute for International Studies and served as its
director from 1984-85.
A native of Denmark, Hansen was a prolific author who wrote numerous
articles and books on the economic theories of interest rates, foreign
trade and exchange, and development. He also served as a consultant
to international agencies and governments, including Morocco, Turkey,
Egypt, Denmark and Syria. Three of his books focused on Egypt, where
he lived the last four years of his life.
Laurence Michalak, vice chair of the Center for Middle Eastern Studies,
described Hansen as "a profound scholar of the Middle East."
Hansen earned degrees at the University of Copenhagen in Denmark
and at Uppsala University in Sweden before becoming an assistant professor
at Uppsala in 1947. He also taught at the National Institute of Economic
Research in Stockholm and at the University of Stockholm. He served
as an advisor to the Institute of Planning in Cairo from 1962-65.
He was named a fellow of the Econometric Society in 1953 and a fellow
for the Association for Middle East Studies in North America in 1975.
Hansen broke his hip during a visit to Switzerland in 1999 and, after
that, moved to Alexandria, Egypt, with his wife, Soad. He then began
to suffer from numerous health problems and died of gastric hemorrhage,
according to one of his stepdaughters, Eglal Zaklama.
Zaklama and Hansen's widow are planning a memorial service for Hansen
at UC Berkeley in August.
Survivors include Hansen's wife, Soad; stepdaughters, Zaklama of
Switzerland, and Magiha Wahba of Alexandria; a son, Simon, of Denmark;
and two daughters.