-5Figure 1: In the presence of a financial accelerator, an interest rate cut generates a sustained increase in production Deviation of GDP from steady state  0  1  2  3  4  5  6  7  8  9  10  Period Strong financial accelerator  Weak financial accelerator  Source: Bank of Canada illustration reflecting System A in the Appendix  Monetary policy fully recognizes and confronts this type of dynamic every day as both positive and negative shocks hit the economy.
However, one aspect of this type of feedback worth noting is that it never gives rise to a boom-bust pattern. If the initial impulse is positive, it will never directly cause below-normal economic activity later. Shocks in such a system cause either a virtuous cycle or a vicious cycle, but not a mix of the two.