Economic growth over the last 125 years has been accompanied by vast changes in the institutional framework of market relationships. These changes range from the structure of the macroeconomy and the role of the state to the characteristics of technology and the organization of business. Conventional approaches to economic organization and the allocation of resources, however, are fundamentally based on the choices of utilitymaximizing individuals and disregard the role of market institutions. Following the theory of Transformational Growth it will be argued in this chapter that institutional and technological change is pivotal for understanding macroeconomic behavior. For the case of Germany it will be shown that business cycle adjustments are indeed fundamentally different if one compares the post-World War II period with the last half of the nineteenth century.