[jeffdavis]

"It's both radically underspecified and overfitted."

He used a perfect model (of a hypothetical world) which had exactly the right parameters, and then he calibrated it using exactly correct data.

So I don't see how this could be underspecified or overfitted. Can you please explain?

"The information-theoretic argument demonstrate that a model cannot exactly match the reality unless it's as complex as the reality."

In this case he defined his model to be reality.

[amalcon]

Those particular statements referred to some representative economic model, not the experiment in question. In the experiment in question, the model is fully specified by definition.

As far as overfitting goes, that applies when you have a parameterized general model and need to discover the correct parameters. You probably won't get the exact correct parameters; instead, you'll (hopefully) get parameters that approximate reality well.

More closely matching the training data can actually make it a worse approximation in the general case.