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• Case | HBS Case Collection | July 2005 (Revised January 2020)

  The U.S. Current Account Deficit

  Laura Alfaro, Rafael Di Tella, Ingrid Vogel, Renee Kim, Sarah Jeong, Matthew Johnson and Jonathan Schlefer

  Investors and policymakers throughout the world were confronted with the risk of painful economic consequences arising from the large U.S. current account deficit. In 2007, the U.S. current account deficit was $731 billion, equivalent to 5.3% of GDP. The implications of the deficit were debated with intensity. At one extreme, it was argued that large deficits would eventually resolve themselves smoothly, even if they persisted for many more years. Former Federal Reserve Chairman Alan Greenspan was among those expecting a "benign resolution to the U.S. current account imbalance." Other analysts, such as economists at the World Bank, believed the large deficits raised the risk of a sharp and disorderly fall of the dollar and that necessary macroeconomic adjustment could be painful, for the United States as well as for the rest of the world. The Financial Times asked: "How long will foreigners be prepared to make such generous 'gifts' to the US?" In this environment, Berkshire Hathaway, run by legendary investor Warren Buffett, postulated that current account imbalances would lead to "some chaotic markets in which currency adjustments play a part" and announced to shareholders a plan to increase investment in overseas companies to protect against this risk. It remained to be seen what the short- and long-term implications of the current account deficit would ultimately yield.

  Keywords: Macroeconomics; Borrowing and Debt; Currency; Foreign Direct Investment; Business and Government Relations; United States;

  Citation:

  Alfaro, Laura, Rafael Di Tella, Ingrid Vogel, Renee Kim, Sarah Jeong, Matthew Johnson, and Jonathan Schlefer. "The U.S. Current Account Deficit." Harvard Business School Case 706-002, July 2005. (Revised January 2020.)  View Details

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• Case | HBS Case Collection | June 2016 (Revised January 2020)

  University of Hong Kong: Bridging East and West

  William C. Kirby, Joycelyn W. Eby and John P. McHugh

  In the early 20th century, the University of Hong Kong (HKU) was established in order to serve as a bridge between mainland China and the British Empire. As an elite institution in the 21st century, HKU continued its role as a bridge, connecting mainland China, Hong Kong, and the world, but in a very different global context. President Peter Mathieson believed that HKU still had an important role to play but knew that HKU needed to adapt to China's growing global presence and the increasing influence of mainland Chinese universities. Mathieson needed to break through institutional complacency and unite HKU's oft-divided students, faculty, and administration behind a plan that would allow HKU to thrive in a landscape in which it competed not only with other institutions in Hong Kong, but also with the increasingly strong key universities in China as well as with leading institutions around the world. Would HKU be able to maintain its position as a top institution linking East and West in an increasingly connected and complex global society?

  Keywords: university administration; university curriculum; university faculty; Higher Education; Curriculum and Courses; Education Industry; Hong Kong; China;

  Citation:

  Kirby, William C., Joycelyn W. Eby, and John P. McHugh. "University of Hong Kong: Bridging East and West." Harvard Business School Case 316-068, June 2016. (Revised January 2020.)  View Details

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• Supplement | HBS Case Collection | October 2019 (Revised January 2020)

  Dulcie Madden (B)—A Difficult Choice

  Shikhar Ghosh and Shweta Bagai

  This is part of a three-case series that follows Dulcie Madden's journey as a founder over five years. Case (A) is about managing growth and cash flow; Case (B) is about the exit decision and conditions on a sale; Case (C) shows Madden dealing with adversity and the choice of “when to quit?”

  Keywords: entrepreneurial management; family; family conflicts; Founders' agreements; growth and development; Cash flow; hardware; VC; scaling; start-up; female ceo; Risk assessment; Entrepreneurship; Growth Management; Cash Flow; Equity; Success; Failure; Acquisition; Business Model; Technology; Valuation; Family and Family Relationships;

  Citation:

  Ghosh, Shikhar, and Shweta Bagai. "Dulcie Madden (B)—A Difficult Choice." Harvard Business School Supplement 820-053, October 2019. (Revised January 2020.)  View Details

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