Reference #329: Thinking in Systems

A reinforcing loop occur wherever an element of a system has the ability to grow as a constant fraction of itself. Such behaviour is commonly seen in populations and economies. This leads to reinforcing loops which exhibit exponential growth.

Consider factories that produce goods and services in an industrial society. The more machines and factories (capital) you have, the more goods and services (output) you can produce. Greater output allows you to invest in more capital: the more you make, the more you can make. This loop is the central engine of growth in an economy.

Meadows. Thinking in Systems, 2008. (31-32)

← PreviousNext →