Cogley and Sargent (2003) analyze the evolution of monetary policy and economic outcomes in the post-WWII U.S. using a Bayesian vector autoregression (VAR) model with drifting parameters and stochastic volatility. They examine how inflation persistence, the natural rate of unemployment, core inflation, and monetary policy activism have changed over time. Their results show that inflation persistence increased in the 1970s but declined in the 1980s and 1990s. Innovation variances were higher in the late 1970s compared to other periods. The authors find that uncertainty about core inflation and persistence are positively correlated. They also find that tests for time-invariant VAR coefficients have low power against their model of drifting coefficients, except for one test that rejects time invariance in the data. The authors argue that monetary policy rules have changed over time, and that inflation persistence has drifted. They also find that inflation persistence is strongly correlated with core inflation, and that the correlation is problematic for certain models of inflation dynamics. The authors use their model to evaluate the evolution of monetary policy activism, finding that the activism parameter has changed over time. They also find that the evolution of policy activism is related to the persistence of inflation and the natural rate of unemployment. The authors conclude that their findings suggest that monetary policy has changed over time, and that the persistence of inflation has drifted.Cogley and Sargent (2003) analyze the evolution of monetary policy and economic outcomes in the post-WWII U.S. using a Bayesian vector autoregression (VAR) model with drifting parameters and stochastic volatility. They examine how inflation persistence, the natural rate of unemployment, core inflation, and monetary policy activism have changed over time. Their results show that inflation persistence increased in the 1970s but declined in the 1980s and 1990s. Innovation variances were higher in the late 1970s compared to other periods. The authors find that uncertainty about core inflation and persistence are positively correlated. They also find that tests for time-invariant VAR coefficients have low power against their model of drifting coefficients, except for one test that rejects time invariance in the data. The authors argue that monetary policy rules have changed over time, and that inflation persistence has drifted. They also find that inflation persistence is strongly correlated with core inflation, and that the correlation is problematic for certain models of inflation dynamics. The authors use their model to evaluate the evolution of monetary policy activism, finding that the activism parameter has changed over time. They also find that the evolution of policy activism is related to the persistence of inflation and the natural rate of unemployment. The authors conclude that their findings suggest that monetary policy has changed over time, and that the persistence of inflation has drifted.