In the article The State of New Keynesian Economics: A Partial Assessment, Gali says the following about the monetary policy in DSGE models: "Exogenous changes in monetary policy have nontrivial effects on real variables, not only on nominal ones."
I have 2 quesitons:
Does it come from the fact that prices are rigid in DSGE models? Or that there is imperfect competition?
Without price rigidity or imperfect competition (that is to say having an RCB model rather than a DSGE model), would it mean that any monetary policy shock (or any demand shock) would only cause inflation?