This paper examines the indeterminacy of monetary policy in the context of a New Keynesian dynamic stochastic general equilibrium (DSGE) model for the U.S. economy. The authors extend the likelihood function of DSGE models to allow for indeterminacy and sunspot fluctuations, constructing posterior weights for the determinacy and indeterminacy regions of the parameter space. They estimate the propagation of fundamental and sunspot shocks and find that monetary policy post-1982 is consistent with determinacy, while pre-Volcker policy is not. The analysis suggests that indeterminacy significantly altered the propagation of monetary policy, demand, and supply shocks before 1979. The paper also discusses the advantages of their multivariate approach over univariate methods, which can be sensitive to model misspecification. The findings contribute to understanding macroeconomic instability during the 1970s and the design of beneficial policy rules.This paper examines the indeterminacy of monetary policy in the context of a New Keynesian dynamic stochastic general equilibrium (DSGE) model for the U.S. economy. The authors extend the likelihood function of DSGE models to allow for indeterminacy and sunspot fluctuations, constructing posterior weights for the determinacy and indeterminacy regions of the parameter space. They estimate the propagation of fundamental and sunspot shocks and find that monetary policy post-1982 is consistent with determinacy, while pre-Volcker policy is not. The analysis suggests that indeterminacy significantly altered the propagation of monetary policy, demand, and supply shocks before 1979. The paper also discusses the advantages of their multivariate approach over univariate methods, which can be sensitive to model misspecification. The findings contribute to understanding macroeconomic instability during the 1970s and the design of beneficial policy rules.