Tied aid, unemployment and welfare

The effect of foreign aid on the welfare levels of both the recipient and the donor country has been a much analysed topic for research in both the theory of international trade and development economics. In the development economics literature, concerns have been raised since the 1960s on the possible adverse effect of foreign aid on domestic savings and growth.1 The trade theory literature in this respect is much older and dates back to the 1920s when Professors Keynes and Ohlin debated on the effect of foreign aid on international terms of trade.2 Ever since, the terms of trade effect has been the cornerstone in the analysis of the welfare effect of foreign aid in the trade theory literature.3 After some early confusion, it is now well established that in a Walrasian stable world economy with two countries, a necessary condition for foreign aid to have perverse effects is that there is some distortion in either of the two countries.4 It is also known that, under normality and substitutability of goods, untied aid cannot be strictly Pareto-improving in a tariff distorted world.5

Welfare effects of aid under quantitative trade restrictions

The paper examines the effects of tied-aid on the welfare of both the donor and the recipient countries. We depart from the previous literature by assuming preexistence of quantitative trade distortions. To mitigate these distortions the donor country provides aid that is tied to the rationed good. Conditions for the presence of the transfer paradox and of the enrichment of both countries are derived and interpreted under the stability of the system. Furthermore, we show that whereas untied aid cannot increase global welfare, tied-aid unambiguously does so.

Antigen-specific CD4 cells assist CD8 T-effector cells in eliminating keratinocytes

Keratinocytes expressing tumor or viral antigens can be eliminated by antigen-primed CD8 cytotoxic T cells. CD4 T-helper cells help induction of CD8 cytotoxic T cells from naive precursors and generation of CD8 T-cell memory. In this study, we show, unexpectedly, that CD4 cells are also required to assist primed CD8 effector T cells in rejection of skin expressing human growth hormone, a neo-self-antigen, in keratinocytes. The requirement for CD4 cells can be substituted by CD40 costimulation. Rejection of skin expressing ovalbumin (OVA), a non-self-antigen, by primed CD8 cytotoxic T cells can in contrast occur without help from antigen-specific CD4 T cells. However, rejection of OVA expressing keratinocytes is helped by antigen-specific CD4 T cells if only low numbers of primed or naive OVA-specific CD8 T cells are available. Effective immunotherapy directed at antigens expressed in squamous cancer may therefore be facilitated by induction of tumor antigen-specific CD4 helper T cells, as well as cytotoxic CD8 T cells.

A combination of local inflammation and central memory T cells potentiates immunotherapy in the skin

Adoptive T cell therapy uses the specificity of the adaptive immune system to target cancer and virally infected cells. Yet the mechanism and means by which to enhance T cell function are incompletely described, especially in the skin. In this study, we use a murine model of immunotherapy to optimize cell-mediated immunity in the skin. We show that in vitro - derived central but not effector memory-like T cells bring about rapid regression of skin-expressing cognate Ag as a transgene in keratinocytes. Local inflammation induced by the TLR7 receptor agonist imiquimod subtly yet reproducibly decreases time to skin graft rejection elicited by central but not effector memory T cells in an immunodeficient mouse model. Local CCL4, a chemokine liberated by TLR7 agonism, similarly enhances central memory T cell function. In this model, IL-2 facilitates the development in vivo of effector function from central memory but not effector memory T cells. In a model of T cell tolerogenesis, we further show that adoptively transferred central but not effector memory T cells can give rise to successful cutaneous immunity, which is dependent on a local inflammatory cue in the target tissue at the time of adoptive T cell transfer. Thus, adoptive T cell therapy efficacy can be enhanced if CD8+ T cells with a central memory T cell phenotype are transferred, and IL-2 is present with contemporaneous local inflammation. Copyright © 2012 by The American Association of Immunologists, Inc.