This working paper by Timothy Cogley and Thomas J. Sargent examines the evolution of monetary policies and outcomes in the post-WWII U.S. using a Bayesian vector autoregression (VAR) model with drifting coefficients and stochastic volatility. The authors present posterior densities for various economic measures, including inflation persistence, the natural rate of unemployment, and "activism coefficients" for monetary policy rules. They find significant variation in these measures over time, with inflation persistence increasing in the 1970s, then decreasing in the 1980s and 1990s. Innovation variances also change systematically, being larger in the late 1970s. The authors use their model to evaluate the power of tests for time-invariance of autoregressive coefficients, finding that most tests have low power against their model. They also explore the implications of their findings for understanding the rise and fall of inflation in the 1970s and 1980s, suggesting that changes in monetary policy rules may have contributed to these outcomes.This working paper by Timothy Cogley and Thomas J. Sargent examines the evolution of monetary policies and outcomes in the post-WWII U.S. using a Bayesian vector autoregression (VAR) model with drifting coefficients and stochastic volatility. The authors present posterior densities for various economic measures, including inflation persistence, the natural rate of unemployment, and "activism coefficients" for monetary policy rules. They find significant variation in these measures over time, with inflation persistence increasing in the 1970s, then decreasing in the 1980s and 1990s. Innovation variances also change systematically, being larger in the late 1970s. The authors use their model to evaluate the power of tests for time-invariance of autoregressive coefficients, finding that most tests have low power against their model. They also explore the implications of their findings for understanding the rise and fall of inflation in the 1970s and 1980s, suggesting that changes in monetary policy rules may have contributed to these outcomes.