Ilse Mintz · 1969
Ilse Mintz’s study argues that postwar West Germany did not escape business cycles; rather, rapid secular growth made the older “classical” signs of recession—absolute declines in output, income, or employment—hard to see. Her central thesis is that in a growing economy the relevant cycle is an alternation between periods of above-average and below-average growth, which she calls “speedups” and “slowdowns.” The work thus revises the NBER tradition without abandoning it: the business cycle remains a broadly diffused movement across many activities, but the movements must be read relative to trend.
“The question posed by this conference may be obsolete, the problem of booms and recessions is not.”
Mintz begins by reopening the definition of the business cycle. She rejects the view that cycles disappear when aggregate output no longer falls. In postwar Europe and Japan, downturns were often experienced not as contraction but as retardation; for policy makers and firms, these retardations were economically meaningful. Her conceptual move is to shift the criterion from absolute direction to relative pace, while insisting that this is not merely semantic but analytically necessary.
“Periods regarded as downswings by business and policy makers in Europe and Japan have not usually been characterized by declines in aggregate output, income or employment.”
The paper’s structure follows from this definitional argument. After discussing dating methods and the selection of twenty-one German indicators, Mintz develops two independent procedures. “Deviation cycles” identify turning points in series adjusted for long-run trends, using a seventy-five-month moving average and an NBER computer procedure. “Step cycles” instead examine alternating high and low growth-rate regimes. The point of using both is methodological discipline: since trend adjustment is partly arbitrary, growth-rate steps provide an independent check.
“This stepwise approach to the selection of turns is necessary because most time series are much too choppy for direct mechanical selection of cyclical maxima and minima.”
The empirical core is the convergence of these two methods. Applied to indicators of employment, production, GNP, investment, income, prices, stock prices, lending, and imports, they reveal a recurring, synchronized cyclical pattern. Mintz’s claim is not that every series behaves identically, but that enough of them turn together to establish a reference chronology. The diffusion index—the excess percentage of indicators expanding over those contracting—translates many individual cycles into economy-wide phases.
“The first impression is that most indicators move in clear-cut cyclical swings with unmistakable turning points.”
This evidence supports Mintz’s final chronology: downturns in April 1951, January 1956, January 1961, and December 1965; upturns in January 1954, March 1959, February 1963, and June 1967. The endpoints are treated as somewhat tentative, but the central turns are robust. Particularly important is that the two quite different techniques yield nearly identical dates for the main postwar cycles.
“The most reassuring aspect of the findings is that four out of five business cycle turns, 1954-63, are the same whether they are based on trend adjusted indicators or on step cycles in the indicators' growth rates.”
Mintz then tests what would happen under classical business-cycle analysis. The answer is revealing: before 1966, West Germany shows no true classical recession, because most aggregates kept rising. Yet the classical diffusion index still changes slope at the growth-cycle dates, confirming that the speedups and slowdowns are not statistical artifacts. The new chronology therefore explains why contemporary observers spoke of recessions even when aggregate decline was absent.
“There is, thus, no evidence of any classical recession until 1966-67.”
The study’s relevance lies in making postwar growth economies comparable to earlier cyclical economies. Mintz preserves the NBER emphasis on diffusion, duration, and reference dates, but adapts it to conditions of sustained expansion. Her “speedup/slowdown” terminology is deliberately value-neutral, avoiding the implication that faster growth is always preferable or slower growth always bad. The result is a chronology usable for historical comparison, policy evaluation, and cross-national business-cycle research.
“The business cycles marked off by the new turning points are without doubt real phenomena, not figments of statistical procedures.”
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