4.1 Identification of Structural Parameters
The first important breakthrough came with a formal solution to the identification problem
which had been formulated earlier by Working (1927). By defining the concept of
‘structure’ in terms of the joint probability distribution of observations, Haavelmo (1944)
presented a very general concept of identification and derived the necessary and sufficient
conditions for identification of the entire system of equations, including the parameters
of the probability distribution of the disturbances. His solution, although general, was
rather difficult to apply in practice. Koopmans, Rubin and Leipnik (1950) used the term