Castle, Jennifer; Hendry, David - Department of Economics, Oxford University - 2011
: over-, exact, and under-specification of the data generation process (DGP). In the first, and most-studied setting, the … variables while retaining the relevant. In an exact specification, the theory formulation is precisely correct and can always … are correctly included, but some are omitted, leading to under-specification. We review the analysis of model selection …