Using the full sample of countries, monetary policy t u r n s procyclical at
threshold spreads (p*) of 2,811 basis points (bp), while fiscal policy t u r n s
procyclical above 4,797 bp (Table 1). Excluding the two countries with
the highest country spreads (Argentina and Ecuador), the results from the
restricted sample show that monetary and fiscal policies turn procyclical at
much lower country risk levels: 822 bp and 574 bp, respectively. Countries
that exhibited risk spreads above the threshold levels during 2002 were
Brazil and Venezuela in the full sample, and Brazil, Colombia, Peru, and
Venezuela in the restricted sample.