\documentclass{article}
\usepackage{com.braju.graphicalmodels}

\catcode`\@=11%

\pagestyle{empty}

\begin{document}
\TeXtoEPS

\LARGE
\psset{unit=10mm,arrowscale=1.5,linewidth=1.5pt}
\begin{pspicture}(0,0)(6,6)%\showgrid
  \SpecialCoor

  \rput(1,1){\GM@node[observed=true]{xt}} \GM@label[angle=-90]{xt}{$y_t$}
  \rput(3,1){\GM@node[observed=true]{xt1}} \GM@label[angle=-90]{xt1}{$y_{t+1}$}

  \rput(1,3){\GM@node[observed=false]{zt}} \GM@label[angle=-40]{zt}{$z_t$}
  \rput(3,3){\GM@node[observed=false]{zt1}} \GM@label[angle=-40]{zt1}{$z_{t+1}$}

  \rput(1,5){\fnode{st}} \GM@label[angle=-40]{st}{$s_t$}
  \rput(3,5){\fnode{st1}} \GM@label[angle=-40]{st1}{$s_{t+1}$}

  \ncline[arrows=->]{st}{st1}
  \ncline[arrows=->]{st}{zt}
  \ncline[arrows=->]{st1}{zt1}

  \ncline[arrows=->]{zt}{xt}
  \ncline[arrows=->]{zt}{zt1}
  \ncline[arrows=->]{zt1}{xt1}

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  \ncarc[arcangle=-45,arrows=->]{st1}{xt1}

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  \psline[arrows=->](3.3,3)(4.5,3)



\end{pspicture}

\endTeXtoEPS
\end{document}