It also became increasingly clear that Tinbergen’s paradigm where economic relations
were taken as given and provided by ‘economic theorist’ was not adequate. It was rarely
the case that economic theory could be relied on for a full specification of the econometric
model. (Leamer, 1978). The emphasis gradually shifted from estimation and inference
based on a given tightly parameterized specification to diagnostic testing, specification
searches, model uncertainty, model validation, parameter variations, structural breaks,
semi-parametric and nonparametric estimation. The choice of approach often governed by
the purpose of the investigation, the nature of the economic application, data availability,
computing and software technology.