How do reinforcing and balancing feedback loops differ, and what does each one do to a system?

Question

Accepted Answer

A reinforcing loop amplifies change (a vicious or virtuous circle); a balancing loop counteracts change and pulls the system back toward a target.
The two basic loop types behave oppositely:

Reinforcing loop
Balancing loop

Effect of a change
Amplifies it — more leads to more
Counteracts it — pushes back

Behaviour over time
Growth or collapse, snowballing
Settles toward a goal / equilibrium

Everyday name
Vicious or virtuous circle
Self-correction, regulation

Example
Panic selling drives prices down, which triggers more selling
A thermostat heats when it's cold, stops when warm

Reinforcing loops give a system its momentum (a rumour spreading, savings compounding); balancing loops give it stability and limits (a body sweating to hold its temperature, a market correcting). Real systems are woven from both, and a behaviour you observe — steady, oscillating, exploding — is usually the net result of several loops pulling against each other.
Tip: Reinforcing = "the rich get richer"; balancing = "what goes up must come down."

	Reinforcing loop	Balancing loop
Effect of a change	Amplifies it — more leads to more	Counteracts it — pushes back
Behaviour over time	Growth or collapse, snowballing	Settles toward a goal / equilibrium
Everyday name	Vicious or virtuous circle	Self-correction, regulation
Example	Panic selling drives prices down, which triggers more selling	A thermostat heats when it's cold, stops when warm