The contribution of Durbin and Watson was,
however, important from a practical viewpoint as it led to a bounds test for residual
autocorrelation which could be applied irrespective of the actual values of the regressors.
The independence of the critical bounds of the Durbin-Watson statistic from the matrix
of the regressors allowed the application of the statistic as a general diagnostic test, the
first of its type in econometrics. The contributions of Cochrane and Orcutt and of Durbin
and Watson marked the beginning of a new era in the analysis of economic time-series
data and laid down the basis of what is now known as the ‘time-series econometrics’
approach.