Vicious circle vs. Virtuous circle

Vicious circle

A self-perpetuating process which returns to its starting point with no improvement from when it was begun.

Example:

"... we keep on putting up prices, raising wages so that people can pay the prices, raising prices again because people can better afford to pay them."

Vicious circle in Macroeconomics

Vicious circle in Management

Virtuous circle

The converse to 'vicious circle' is 'virtuous circle', referring to a process of positive feedback. 

Prices will then come down to a point that may not hamper the natural progress of trade, which ought in this country to be healthy for years to come.

We might even be able to replace what has been termed the vicious circle with the virtuous circle.

Economic growth can be seen as a virtuous circle. It might start with an exogenous factor like technological innovation. As people get familiar with the new technology, there could be learning curve effects and economies of scale. This could lead to reduced costs and improved production efficiencies. In a competitive market structure, this will probably result in lower average prices. As prices decrease, consumption could increase and aggregate output also. Increased levels of output leads to more learning and scale effects and a new cycle starts. However, pollution, natural resource depletion and other externalities associated with uncontrolled economic growth can turn the virtuous cycle into a vicious cycle

Virtuous circle in Macroeconomics

Virtuous circle in Management