Monetary policy can affect trade balance by either boosting or reducing demand, depending on the situation. A study using US data found that when monetary policy is loosened, the trade balance strengthens, and when it is tightened, the trade balance weakens. This effect is more pronounced with countries that have flexible exchange rates. The study also looked at how different types of monetary policies and post-crisis changes impact trade spillovers. Overall, the findings suggest that monetary policy can have spillover effects on trade, but it's important to consider other policy measures to offset any negative impacts.