WORTH VALUING OF ALL GOODS AT WORLD PRICES

 The justification in the Little-Mirrlees approach for valuing all goods at world prices is that it avoids the use of the exchange rate in order to value in a single currency some goods measured at world prices (traded goods) and others measured at domestic prices (non - traded goods). To avoid the trouble worth using a foreign exchange rate some economists feel it is a lot of trouble for accuracy because of need to disaggregated non - traded goods into their traded and non - traded inputs which requires input - out put data  which do not exist in many cases. It may be just as accurate, it is argued, to convert the prices of non-traded goods into a single currency by the exchange rate approximately for under or over valuation.