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# Virtuous circle (macroeconomics) - Crystal diagram

This hexagon diagram sample was redesigned from the Wikipedia file: Virtuous circle in macroeconomics.svg. "An example of the use of a virtuous circle in macroeconomics." [en.wikipedia.org/wiki/File:Virtuous_circle_in_macroeconomics.svg] "A virtuous circle and a vicious circle (also referred to as virtuous cycle and vicious cycle) are economic terms. They refer to a complex chain of events that reinforces itself through a feedback loop. A virtuous circle has favorable results, while a vicious circle has detrimental results. Both circles are complexes of events with no tendency towards equilibrium (at least in the short run). Both systems of events have feedback loops in which each iteration of the cycle reinforces the previous one (positive feedback). These cycles will continue in the direction of their momentum until an external factor intervenes and breaks the cycle. The prefix "hyper-" is sometimes used to describe these cycles if they are extreme. The best-known example of a vicious circle is hyperinflation. ... Example in macroeconomics. Virtuous circle. Economic growth can be seen as a virtuous circle. It might start with an exogenous factor such as 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 or a decrease in employment as it takes fewer workers to produce the same output. As prices decrease, consumption could increase and aggregate output also. Increased levels of output lead to more learning and scale effects and a new cycle starts." [en.wikipedia.org/wiki/Virtuous_circle_and_vicious_circle] The crystal diagram example "Virtuous circle (macroeconomics)" was created using the ConceptDraw PRO diagramming and vector drawing software extended with the Target and Circular Diagrams solution from the Marketing area of ConceptDraw Solution Park. www.conceptdraw.com/solution-park/marketing-target-and-circular-diagrams
Hexagon diagram