How to deal with circular causality

[Pratap Pundir]

This is a statistics question rather than a Stata question. But I figured I'd ask anyway, since the experts are here.

Often in time series and panels, the "dependent" and "causal" variable don't share purely that relationship. There is a fair bit of reverse causality as well. ,e.g.
x causes y, but then either y causes x directly or y causes z which causes x, and you have a whole cycle going....

What are some of the ways to deal with this sort of an issue? How does one choose among these methods (if such a choice needs to be made) based on one's data?

[Carlo Lazzaro]

Pratap:
your query falls into the wide fields of endogeneity.
The best recommendation is to take a look at an advanced econometrics textbook and see how the issue is handled.