A vicious circle (or cycle) is a complex chain of events that reinforces itself through a feedback loop, with detrimental results.[1] It is a system with no tendency toward equilibrium (social, economic, ecological, etc.), at least in the short run. Each iteration of the cycle reinforces the previous one, in an example of positive feedback. A vicious circle will continue in the direction of its momentum until an external factor intervenes to break the cycle. A well-known example of a vicious circle in economics is hyperinflation.
The contemporary subprime mortgage crisis is a complex group of vicious circles, both in its genesis and in its manifold outcomes, most notably the late 2000s recession. A specific example is the circle related to housing. As housing prices decline, more homeowners go "underwater", when the market value of a home drops below that of the mortgage on it. This provides an incentive to walk away from the home, increasing defaults and foreclosures. This, in turn, lowers housing values further from over-supply, reinforcing the cycle.[2]
The foreclosures reduce the cash flowing into banks and the value of mortgage-backed securities (MBS) widely held by banks. Banks incur losses and require additional funds, also called “recapitalization”. If banks are not capitalized sufficiently to lend, economic activity slows and unemployment increases, which further increase the number of foreclosures. Economist Nouriel Roubini discussed vicious circles in the housing and financial markets in interviews with Charlie Rose in September and October 2008.[3][4][5]
Designing ecological virtuous circlesedit
By involving all stakeholders in managing ecological areas, a virtuous circle can be created where improved ecology encourages the actions that maintain and improve the area.[6]
^Morrison Scott A (March 2016). "Designing virtuous socio-ecological cycles for biodiversity conservation". Biological Conservation. Elsevier. 195: 9–16. doi:10.1016/j.biocon.2015.12.022.
^"Covid: WHO says it is very worried about Europe surge". BBC News. November 20, 2021.
General and cited referencesedit
Schlesinger, L.; Heskett, J. (1991). "Breaking the cycle of failure in services". Sloan Management Review. 31: 17–28.
– In this link the author uses Aristotelian virtue as a mediator between passion and reason in the construction of utility/consumption functions in an esoteric part of consumer behaviour theory related to decision making in addictive situations.
China: A Stabilizing or Deflationary Influence in East Asia? The Problem of Conflicted Virtue – In this paper the author is using virtue in the sense of a positive outcome (balance of payments surplus) that conflicts with long term regional growth and stability.
External linksedit
Media related to Vicious circles at Wikimedia Commons
Media related to Virtuous circles at Wikimedia Commons
The dictionary definition of vicious circle at Wiktionary
The dictionary definition of virtuous circle at Wiktionary
December 17, 2023
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For other uses see Vicious Circle disambiguation This article needs additional citations for verification Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Vicious circle news newspapers books scholar JSTOR March 2012 Learn how and when to remove this template message A vicious circle or cycle is a complex chain of events that reinforces itself through a feedback loop with detrimental results 1 It is a system with no tendency toward equilibrium social economic ecological etc at least in the short run Each iteration of the cycle reinforces the previous one in an example of positive feedback A vicious circle will continue in the direction of its momentum until an external factor intervenes to break the cycle A well known example of a vicious circle in economics is hyperinflation Depression expressed as a vicious circleWhen the results are not detrimental but beneficial the term virtuous cycle is used instead Contents 1 Examples 1 1 Vicious circles in the subprime mortgage crisis 1 2 Designing ecological virtuous circles 1 3 Other 2 See also 3 References 4 General and cited references 5 External linksExamples editVicious circles in the subprime mortgage crisis edit Further information Subprime mortgage crisis nbsp Vicious cycles in the subprime mortgage crisisThe contemporary subprime mortgage crisis is a complex group of vicious circles both in its genesis and in its manifold outcomes most notably the late 2000s recession A specific example is the circle related to housing As housing prices decline more homeowners go underwater when the market value of a home drops below that of the mortgage on it This provides an incentive to walk away from the home increasing defaults and foreclosures This in turn lowers housing values further from over supply reinforcing the cycle 2 The foreclosures reduce the cash flowing into banks and the value of mortgage backed securities MBS widely held by banks Banks incur losses and require additional funds also called recapitalization If banks are not capitalized sufficiently to lend economic activity slows and unemployment increases which further increase the number of foreclosures Economist Nouriel Roubini discussed vicious circles in the housing and financial markets in interviews with Charlie Rose in September and October 2008 3 4 5 Designing ecological virtuous circles edit By involving all stakeholders in managing ecological areas a virtuous circle can be created where improved ecology encourages the actions that maintain and improve the area 6 Other edit Other examples include the poverty cycle sharecropping and the intensification of drought The recurring surges of the COVID 19 pandemic is a vicious circle on a global scale 7 See also editCatch 22 logic Causal loop diagram Chain reaction Cycle of poverty Cycle of violence Closed timelike curve Endogeneity econometrics Positive feedback Rational addiction Reflexivity sociology Self fulfilling prophecy Spiral of silence Unintended consequencesReferences edit Charles Webel Johan Galtung 19 March 2012 Handbook of Peace and Conflict Studies Routledge ISBN 9780203089163 Retrieved 19 March 2012 Feldstein Martin 18 November 2008 How to Help People Whose Home Values Are Underwater Opinion The Wall Street Journal Retrieved 2013 09 05 Roubini amp Panel Charlie Rose Retrieved 2013 09 05 Rose amp Roubini Discussion Charlierose com Archived from the original on 2013 04 01 Retrieved 2013 09 05 Rose amp Roubini Charlierose com Retrieved 2013 09 05 Morrison Scott A March 2016 Designing virtuous socio ecological cycles for biodiversity conservation Biological Conservation Elsevier 195 9 16 doi 10 1016 j biocon 2015 12 022 Covid WHO says it is very worried about Europe surge BBC News November 20 2021 General and cited references editSchlesinger L Heskett J 1991 Breaking the cycle of failure in services Sloan Management Review 31 17 28 Rational Choice with Passion Virtue in a Model of Rational Addiction In this link the author uses Aristotelian virtue as a mediator between passion and reason in the construction of utility consumption functions in an esoteric part of consumer behaviour theory related to decision making in addictive situations China A Stabilizing or Deflationary Influence in East Asia The Problem of Conflicted Virtue In this paper the author is using virtue in the sense of a positive outcome balance of payments surplus that conflicts with long term regional growth and stability External links edit nbsp Media related to Vicious circles at Wikimedia Commons nbsp Media related to Virtuous circles at Wikimedia Commons nbsp The dictionary definition of vicious circle at Wiktionary nbsp The dictionary definition of virtuous circle at Wiktionary Retrieved from https en wikipedia org w index php title Vicious circle amp oldid 1182981894, wikipedia, wiki, book, books, library,
