Pranav Garg - Research

Working papers

1. Monetary Transmission in Equity Markets: Evidence from Financial Intermediaries, with M. Famiglietti [PDF]

Presented at: SGF Conference Zurich 2026, MFA Annual Meeting 2026, 19th International Behavioral Finance Conference at the University of Chicago 2025, AFA Posters 2025, Midwest Macro Meetings at Purdue University 2024.

Doctoral Symposium Outstanding Paper Award, MFA Annual Meeting 2026

We show that heterogeneous equity flows across financial intermediaries amplify monetary policy transmission to asset prices. We find that mutual funds with performance-sensitive retail investors experience outflows after contractionary monetary shocks, triggering forced equity sales. Banks have funding that is insensitive to recent performance and therefore absorb these sales and provide liquidity. This intermediary-level heterogeneity aggregates meaningfully: stocks held by more performance-sensitive investors exhibit larger price declines following monetary tightening. To explain these patterns, we develop an intermediary asset pricing model where heterogeneous intermediaries manage portfolios for investors with performance-sensitive flows, highlighting a novel mechanism of monetary transmission to equities.

2. Facing Default?, with M. Guenzel, S. Kogan, M. Niessner & K. Shue [Draft coming soon]

Presented at (including upcoming): SFS Cavalcade 2026, 17th Annual FSU Truist Beach Conference 2026, Adam Smith Workshop 2026, FRA Early Ideas Session 2025, Boulder Summer Conference on Consumer Financial Decision Making 2025.

3. Insulated Leaders: Market Share and Earnings Cyclicality, with J. Weber [PDF]

Presented at: AFA Posters 2026, Midwest Macro Meetings at Federal Reserve Bank of Cleveland 2025.

High-market-share firms face costs of capital that are more insulated from monetary policy cycles and, in turn, have smoother investment than lower-share competitors. We argue that this insulation originates in leaders’ economic competencies: customer capital, recurring-revenue systems, franchise capital and installed bases that stabilize earnings over the business cycle. Using earnings-call transcripts and regulatory filings, we show that leaders disproportionately describe their businesses in terms of contracted, recurring, and sticky customer relationships, and that this language predicts lower future earnings cyclicality. Less cyclical earnings reduce the pass-through of contractionary monetary shocks into leaders’ cost of capital, even after controlling for size, leverage, liquidity, and standard asset-pricing factor exposures. As a result, monetary tightening falls disproportionately on followers: leaders invest through tightening episodes, followers retrench, and market share reallocates toward incumbents, increasing industry concentration.

4. When Supervision Meets Politics: Bailouts, Lending and Investment [PDF]

Presented at: MFA Annual Meeting 2026, 6th RCF-ECGI Corporate Finance and Governance Conference 2025, Bank of Finland's Banking Workshop 2024, Indian Management Research Conference at IIM Ahmedabad 2024.

This paper shows that political interference can transform supervision intended to discipline banks into a vehicle for political lending. Examining India's 2015-16 asset quality review, I find state-owned banks massively underreported bad loans, consequently triggering taxpayer-funded bailouts. These bailouts carried political strings that increased credit supply by state banks to "zombie" firms and risky state-owned enterprises, while private banks deleveraged. Exploiting staggered state elections in a within-bank design, I find such lending concentrates at branches within election constituencies. This pattern is unique to bailed-out state banks. Political bailouts crowd out productive private firms and dampen investment by 7%.

5. From Collateral to Credit to Real Activity: Causal Evidence on the Bank Lending Channel, with A.-L. Delatte & J. Imbs [PDF]

Using a unique identification methodology, we show that easing collateral requirements has economy-wide effects on firms' real outcomes through increased credit. These effects benefit all firms, not just those with newly eligible collateral. By categorizing banks based on their pre-reform loan portfolios, we compare banks with varying exposures to the change in collateral constraints but otherwise similar loan portfolios. We introduce a bank-level metric for firms' real outcomes, calculated as a loan-weighted average across borrowers, which enables us to use the same identification for both credit and real effects. The impacts on credit, investment, productivity, and dividends are large.

Technical reports

1. Monetary Policy Transmission in India: New Evidence from Firm-Bank Matched Data, Reserve Bank of India, Working Paper Series (DEPR) 01/2021

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