b'FACULTY SPOTLIGHT: MOTOHIRO YOGOBCF faculty member Motohiro Yogo and Ralph Koijen of the University ofChicago developed a new approach to understanding asset prices usingportfolio holdings data in a 2019 publication (A Demand System Approach toAsset Pricing, Journal of Political Economy). The forces of supply and demandultimately determine asset prices, such as stock prices, bond yields, andexchange rates. Koijen and Yogo estimate an asset demand system for the USstock market and show the importance of low demand elasticities and demandshocks of institutional investors for explaining volatility and predictability. Insubsequent work with various coauthors, they apply demand system assetpricing to study the impact of quantitative easing in the euro area, the impact of ESG investing on the US stock market, and the importance of global portfolio flows for exchange rates.Koijen and Yogo published a book on the Financial Economics of Insurance (Princeton University Press) in April2023, based on their research on the insurance sector over the last decade. The traditional role of insurers is toinsure idiosyncratic risk through products such as life annuities, life insurance, and health insurance. With thedecline of private defined benefit plans and government pension plans around the world, insurers areincreasingly taking on the role of insuring market risk through minimum return guarantees. Insurers also usemore complex capital management tools such as derivatives, off-balance-sheet reinsurance, and securitieslending. Financial Economics of Insuranprovides a unified framework to study the impact of financial andFinancial Economics of Insuranceregulatory frictions as well as imperfect competition on all insurer decisions. The book covers all facets of themodern insurance sector, guiding readers through its complexities with empirical facts, institutional details, andquantitative modeling.BACKGROUNDMotohiro Yogo is a Professor of Economics and the Hugh Leander and Mary Trumbull Adams Professor for theStudy of Investment and Financial Markets. He is also a research associate of the NBER, a co-director of theNBER Insurance Working Group, and a research consultant at the Federal Reserve Bank of Minneapolis. He is afinancial economist with research interests in asset pricing, insurance, international finance, and householdfinance. He teaches undergraduate financial investments and graduate asset pricing at Princeton University.Prior to joining Princeton in 2015, he held research and teaching positions at the Federal Reserve Bank ofMinneapolis and Wharton. He earned a Ph.D. in economics from Harvard University in 2004 and an A.B. ineconomics from Princeton in 2000.Read the overview,introduction, praise for thebook, and more about theauthors.2'