Steve writes wide-rangingly, taking issue with several aspects of empirical macroeconomics.
Steve goes for the modern VAR literature, which seeks to identify monetary policy shocks, and measures that these shocks have effects on real variables, and that their effects on all variables take time to their full effects.
He rightly points out that we might be concerned how VAR researchers identify those shocks. But, can we dismiss all of them?
The methods I know about comprise; short-run timing restrictions embedded in the VAR [eg Christiano-Eichembaum-Evans]; long-run restrictions [Blanchard-Quah]; sign restricitions [Uhlig and many others]; narrative methods of identifying monetary policy shocks [Romer and Romer]; monetary policy surprise measures [Rudebusch; heavily criticised by Sims himself, but still] constructed from the gap between rate expectations and outturns; external instruments [Stock and Watson, Mertens and Ravn…].
With the exception of the Uhlig work on sign restrictions, [contradicted by other, later work in a…
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Utopia, you are standing in it! 
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