The most common example of a reinforcing loop is compound interest. In the system of a bank account, the amount of money generated by interest is increased by the total balance in the account. Equally, the money generated by interest increases the total balance. Because the balance increases the interest and the interest increases the balance, these actions form a reinforcing loop.

Another example might be the reinforcing loop of compliments and confidence. If you receive a compliment, it may increase your confidence, and as your confidence increases you will receive more compliments.

Reinforcing loops also operate in the negative, reinforcing less than ideal stocks. For instance, in a crowded area, individuals running, will increase the collective panic, and an increase in collective panic will increase the number of individuals running.

A reinforcing loop is notated with two or more variables in a closed loop which “+” or add to each other.