Posted on 04/18/2013 7:13:08 AM PDT by SeekAndFind
Whoops.
An apparent error in Carmen Reinhart and Kenneth Rogoff’s influential study of government debt was the result of a simple mistake in Microsoft Excel that all spreadsheet jockeys fear. Here it is:
The cells outlined in dark blue contain the data points that Reinhart and Rogoff used to reach their conclusion that countries with a debt-to-GDP ratio of 90% or higher see average growth of -0.1%. As you can see, they failed to include Denmark, Canada, Belgium, Austria, and Australia. Including those countries—and making a few other adjustments—makes the growth rate 2.2%, according to new research.
The Excel mistake could have been avoided with a few simple tricks.
As an example, here’s a spreadsheet with some figures from Apple’s first quarter earnings this year:
The totals for revenue and expenses are calculated in the spreadsheet by adding up the numbers above those cells, and the value for net income is determined by subtracting total expenses from total revenue. Now, to make sure you typed in the formula for net income correctly, you can double-click on the cell: Not only will Excel reveal the formula, but it will also highlight all of the other cells involved.
That basic technique will save you most of the time. But for complicated spreadsheets—if you have a cell with a formula that involves another cell with a different formula that involves yet another cell,
(Excerpt) Read more at businessinsider.com ...
The Ruling Class still pushing the idea that massive government debt and massive government spending produces prosperity.
After the Cloward-Piven collapse, our new bosses will have a big laugh over how stupid people were.
Just for the record, I AM THE KING OF EXCEL. Any doubts and I’ll Vlookup, Dsum, and toss in a Macro that’ll require the a long Counta to 10 before the ref says your done.
Gosh dang I’m a geek......
Relying on Microsoft products to manage the global economy.
We are DOOOOOOMED!!
As if association is causality anyhow.
While the excel tip may be good. The headline premise is flawed.
The spreadsheet error did not ruin the global economy, the government debt did. Socialism always crashes, and (except in very rare cases) government debt is alwya a result of socialism
Garbage In, Garbage Out.
By the “logic” of the “study”, debt is good and should be piled up. I can do that. Let the government give me a few trillion, and issue more debt. Voila! The “study’s” conditions have been met for better growth.
Nutsos.
I work in extremely complex financial models all day and this “error check” in this article is weak at best. Plenty of ways to double check and validate formulas. A minor step up is using conditional formatting to highlight when numbers, using two different methods of calculation, don’t match.
That being said this was a major f**k up by these guys. This study was used by numerous people (including Paul Ryan) to push “austerity” as a way to avoid way below average growth. Turns out the “way below average” growth wasn’t so much. Not to say that 90+% debt/GDP is a good thing but it’s just not as bad as this study showed thanks to this basic Excel error.
Thank goodness I was afraid we were in financial trouble. I bet some cypriots will be happy about this too.
OH KING OF EXCEL — How to create a cell with a flashing color background?
I’m reminded of the story about the engineer in the early days of Microsoft who screwed up the programming on Word. He thought he would be fired but Gates told him, ‘of course not, you just had a $million training event not to do that again.’
RE: The spreadsheet error did not ruin the global economy, the government debt did. Socialism always crashes, and (except in very rare cases) government debt is alwya a result of socialism
What do you say to the report that if the model included Denmark, Canada, Belgium, Austria, and Australia, and made a few other adjustments, countries, even with a debt-to-GDP ratio of 90% or higher see average growth rate of 2.2%?
In the post WWII period this is true. .
But historically government debt is the result of war.
I wish they would quit saying it’s an “Excel Error” - it’s a stupid user error, writing the wrong formula. Excel did what it was told to do, no error in the program at all.
Excel did what the user instructed Excel to do.
Precisely correct. We call it a blunder. A careless mistake. Anyone who does not pay attention, check and re-check will make a blunder.
Computers have done great things in making repetitive work less grueling but they have not replaced the need for thinking and careful work. You can’t multi-task all the time and few are ever really successful at it at all.
Cell Background Flash:
Code#1:
Sub FlashBack()
‘Make cell range Background color, flash x times, x fast, in x color,
‘when Ctrl-a is pressed, you must set this macro option.
Dim newColor As Integer
Dim myCell As Range
Dim x As Integer
Dim fSpeed
‘Make this cell range background flash!
Set myCell = Range(”A1:A2”)
Application.DisplayStatusBar = True
Application.StatusBar = “... Select Cell to Stop and Edit or Wait for Flashing to Stop! “
‘Make cell background flash to this color!
‘Black 25, Magenta 26, Yellow 27, Cyan 28, Violet 29, Dark Red 30,
‘Teal 31, Blue 32, White 2, Red 3, Light Blue 41, Dark Blue 11,
‘Gray-50% 16, Gray-25% 15, Bright Cyan 8.
newColor = 27
‘Make the cell range flash fast: 0.01 to slow: 0.99
fSpeed = 0.2
‘Make cell flash, this many times!
Do Until x = 35
‘Run loop!
DoEvents
Start = Timer
Delay = Start + fSpeed
Do Until Timer > Delay
DoEvents
myCell.Interior.ColorIndex = newColor
Loop
Start = Timer
Delay = Start + fSpeed
Do Until Timer > Delay
DoEvents
myCell.Interior.ColorIndex = xlNone
Loop
x = x + 1
Loop
Application.StatusBar = False
Application.DisplayStatusBar = Application.DisplayStatusBar
End Sub
Cell Font Flash:
Code#2:
Sub FlashFont()
‘Make cell range font flash, x times, x fast, in x color,
‘when Ctrl-z is pressed.
Dim newColor As Integer
Dim myCell As Range
Dim x As Integer
Dim fSpeed
‘Make this cell range font flash!
Set myCell = Range(”A1:A2”)
Application.DisplayStatusBar = True
Application.StatusBar = “... Select Cell to Stop and Edit or Wait for Flashing to Stop! “
‘Make cell font flash to this color!
‘Black 25, Magenta 26, Yellow 27, Cyan 28, Violet 29, Dark Red 30,
‘Teal 31, Blue 32, White 2, Red 3, Light Blue 41, Dark Blue 11,
‘Gray-50% 16, Gray-25% 15, Bright Cyan 8.
newColor = 3
‘Make the cell range flash fast: 0.01 to slow: 0.99
fSpeed = 0.3
‘Make cell flash, this many times!
Do Until x = 20
‘Run loop!
DoEvents
Start = Timer
Delay = Start + fSpeed
Do Until Timer > Delay
DoEvents
myCell.Font.ColorIndex = newColor
Loop
Start = Timer
Delay = Start + fSpeed
Do Until Timer > Delay
DoEvents
myCell.Font.ColorIndex = xlAutomatic
Loop
x = x + 1
Loop
Application.StatusBar = False
Application.DisplayStatusBar = Application.DisplayStatusBar
End Sub
Sub reSetFlash()
‘Re-set cell range color if edit break on color, Ctrl-r to re-set!
ActiveCell.Select
Selection.Interior.ColorIndex = xlNone
End Sub
Source:
http://www.mrexcel.com/forum/excel-questions/32791-flashing-cells.html
PS - I use MS-Works v9.0, so I can’t vouch for those formulas.
The period in which these countries had a debt-to-GDP ratio of 90% or higher average growth rate of 2.2% was immediately after the Second World War.
This debt was due to the consequences of the war namely war debt and the cost of rebuilding after the war. The debt was not wasteful social welfare programs that stifle worker productivity.
The major error in this study could be exactly that it does not specify governments that incure debt due to social welfare state spending and other government debt.
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