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A feedback loop is a term commonly used in economics to refer to a situation where part of the output of a situation is used for new input. An example of a positive feedback loop would be one where success feeds success. A company could make money which is then reinvested in activities which lead to more income generation. Likewise a population with rising income per capita, spends more money which in turns leads to rising income per capita.
A negative feedback loop is strictly speaking one that brings about a situation which is self regulating. For example, a population of lions grows and eats much of its available prey. There is then a shortage of food for the lions which causes a reduction in the lions' population and allows a resurgence in the populations of the animals they hunt.
An economist interviewed by the FT on the US housing market in January 2013 was talking about the beginning of a reversal of the house price crash in hard-hit areas such as Florida. If house buyers regained enough equity they would be able to jump from interest rates that they locked into before the house price crash of 6-7 per cent and be able to refinance at current levels of 3.5 per cent. Households that manage to refinance will be able to consume more. "There's going to be a positive feedback loop that will help refinancing, help home sales and have a wealth effect," the economist said.
Also in January 2013 there were signs that a severe drought would persist in certain areas of the United States. A forecaster at a climate research institute commented that drought tends to intensify because moisture tends to evapourate more quickly than it would do from saturated ground. "There's a positive feedback loop, unfortunately, for drought," the forecaster commented.