A virtuous circle or virtuous cycle is a feedback loop in which solving one problem makes solving future problems easier. It is most likely to be applied in situations in which the feedback loop is in some way self-sustaining.
Examples include increased health leading to improve education leading to improved earnings leading to improved health and education in the next generation; less consumption of fossil fuels leading to less fossil fuels used in mining and transporting fuel, leading to less need for fossil fuels; and profit leading to upgraded factories and more hiring resulting in a better product and lower production costs, leading to more profit.
Effects such as the network effect, o-ring theory, bootstrapping and positive-sum games are closely related and often overlap with virtuous cycles. It is tempting to equate a virtuous cycle with a positive feedback loop, but negative feedback loops can also be virtuous circles, as with the fossil fuels example above.
The opposite effect is known as a vicious cycle. It is interesting to note that, at the time of this posting, the most popular forms of the terms as determined by Google ngram are 'virtuous circle' but 'vicious cycle'; however, both forms of each are in common usage.