GATE Syllabus : IIT GATE 2025 Economics Entrance Exam Details

Topic

Concepts

Reading Comprehension

Ability to understand complex language material in short paragraphs and answer questions regarding them. 

Expression

Questions on stylistic and rhetorical aspects of a short passage including corrections or modifications of particular sentences.

Analytical Reasoning

Ability to understand relationships in statements or short passages and being able to draw reasonable conclusions/inferences from them. 

Logical Reasoning

Thinking critically to evaluate or to predict an argument, identify the main and supporting arguments, predict outcomes etc. 

Microeconomics

Theory of Consumer Behaviour

Cardinal Approach and Ordinal Approach; Consumer Preferences; Nature of the utility function; Marshallian and Hicksian demand functions; Duality Theorem. Slutsky equation and Comparative Statics. Homogeneous and Homothetic Utility Functions; Euler’s Theorem

The Theory of Revealed Preference

Weak Axiom of Revealed Preference and Strong Axiom of Revealed Preference

Theory of Production and Costs

Short-run and Long-run Analysis, Existence and Stability of Market Equilibrium: Walrasian and Marshallian Stability Analysis. The Cobweb Model, Decision making under uncertainty and risk.

Asymmetric Information

Adverse Selection and Moral Hazard. Theory of Agency costs.

The Theory of Search, Non Cooperative games 

Constant sum game, Mixed Strategy & Pure Strategy, Bayesian Nash Equilibrium, SPNE, Perfect Bayesian Equilibria.

Theory of Firm

Market Structures — Competitive and Non-competitive equilibria and their efficiency properties. Structure-Conduct-Performance Paradigm

Factor Pricing

Marginal productivity, Theory of Distribution in Perfectly Competitive markets, Theory of Employment in Imperfectly Competitive Markets — Monopolistic Exploitation, General Equilibrium Analysis.

Public goods and market failure

Externalities, public goods and markets with asymmetric information (adverse selection and moral hazard) 

Welfare Economics

Fundamental Theorems, Social Welfare Function. Efficiency Criteria: Pareto-Optimality.             

Macroeconomics

National income accounting 

Closed Economy Concepts and Measurement and Open Economy Issues

Determination of output and employment

Classical & Keynesian Framework

Theories of Consumption

Absolute Income Hypothesis, Relative Income Hypothesis, Life Cycle Hypothesis, Permanent Income Hypothesis and Robert Hall’s Random Walk Model; 

Investment Function Specifications – Dale Jorgenson’s Neoclassical Theory of Capital Accumulation and Tobin’s, Keynesian Stabilization Policies, (Autonomous) Multipliers and Investment Accelerator,  Demand and Supply of Money, Components of Money Supply,  Liquidity Preference and Liquidity Trap;

Money Multiplier, Interest Rate determination, Central Banking, Objectives, Instruments (Direct and Indirect) of Monetary Policy, Prudential Regulation, Quantitative Easing (Unconventional Monetary Policy), Commercial Banking, Non-Banking Financial Institutions, Capital Market and its Regulation

Theories of Inflation and Expectations

Augmented Phillips Curve, Real Business Cycles, Adaptive Expectations Hypothesis, Rational Expectation Hypothesis and its critique. 

Closed Economy

IS – LM Model and Mundell Fleming Model: Monetary and Fiscal Policy Efficacy. The Impossible Trinity.  

Indian Economy

Economic Growth in India

Pattern and Structure

Agriculture, Industry & Services Sector

Pattern & Structure of Growth, Major Challenges, Policy Responses

Rural & Urban Development

Issues, Challenges & Policy Responses, Flow of Foreign Capital, Trade Policies

Infrastructure Development

Physical and Social; Public-Private Partnerships, Reforms in Land, Labour and Capital Markets, Poverty, Inequality & Unemployment,: SRelations and Finance Commissions of India;    

Functioning of Monetary Policy in India

Fiscal Policy  in the Indian context, Structure of Receipts and Expenditure, Tax reforms-Goods and Services Tax, Issues of Growth and Equity, Fiscal Federalism;

Centre-State Financial Sustainability of Deficits and Debt, The Fiscal Responsibility and Budget Management Act 2003, Demonetization and aftermath. India’s balance of payments, Composition of India’s Trade, Competitiveness of India’s exports, India’s exchange rate policy.  

Development Economics

Theories of Economic Development

: Adam Smith, David Ricardo, Karl Marx, J. Schumpeter, W. Rostow, Balanced & Unbalanced Growth, Big Push Approach, 

Indicators of Economic Development

HDI, SDGs, MDGs, Poverty and Inequalities – Concepts and Measurement Issues, 

Social Sector Development

Health, Education, Gender, Fertility, Morbidity, Mortality, Migration, Child Labor, Age Structure, Demographic Dividend

Models of Economic Growth

Harrod-Domar, Solow, Ramsey, Technical progress – Disembodied & Embodied, Endogenous Growth Models

Public Economics

Market Failure and Remedial Measures

Asymmetric Information, Public Goods, Externality, Regulation of Market – Collusion and Consumers’ Welfare

Public Revenue

Tax & Non-Tax Revenue, Direct & Indirect Taxes, Progressive and non-Progressive Taxation, Incidence and Effects of Taxation, Public expenditure, Public Debt and its management, Public Budget and Budget Multiplier, Tax Incidence, Fiscal Policy and its implications,  Environment as a Public Good, Market Failure and Coase Theorem, Cost-Benefit Analysis. 

International Economics

Theories of International Trade, International Trade under Imperfect Competition, Gains from Trade, Terms of Trade, Trade Multiplier, Tariff and Non-Tariff barriers to trade; Dumping and Anti-Dumping Policies, GATT, WTO and Regional Trade Blocs; Trade Policy Issues, Balance of Payments: Composition, XH: Humanities and Social Sciences  Equilibrium and Disequilibrium and Adjustment Mechanisms, Foreign Exchange Market and Arbitrage, Exchange rate determination,  IMF & World Bank. 

Statistics, Econometrics and Mathematical Economics

Probability Theory

Concepts of probability, Probability Distributions [Discrete and Continuous], Central Limit Theorem

Econometrics

Index Numbers and Construction of Price Indices, Sampling Methods & Sampling Distribution, Statistical Inferences, Hypothesis Testing, Linear Regression Models and the Gauss Markov Theorem, Heteroscedasticity, Multicollinearity and Autocorrelation, Spurious regressions and Unit roots, Simultaneous Equation Models – recursive and non-recursive, Identification Problem

Linear Algebra

Matrices, Applications of Cramer’s Rule, Static Optimization Problems and Applications, Input-Output Model, Linear Programming

Calculus

Differential Calculus and its Applications, Difference equations and Differential equations with applications