Very Preliminary

We want to find a new business cycle dating scheme for pre-World War I Germany. For this purpose we employ multivariate spectral analysis to com-pare national product estimates to stock market indices. Then we choose the one being closest to the stock market benchmark to date the business cycle. We find that business cycles obtained from deflated national product series are severely distorted by the implicit price deflator provided by Hoffmann 1 (1965). However, of the nominal series, Hoffmann’s income estimate corre-lates best with the stock market, while the one by Hoffmann and Mueller (1959) is too smooth especially before 1890. We find impressive congruency between the stock market and nominal wages, a subseries of Hoffmann’s in-come estimate. We can show that a substantial part of these series, although containing prices, are driven by real movements. Our findings confirm the traditional business cycle chronology for Germany of Burns and Mitchel