Amir Yaron (born 1964) is an Israeli-American economist and the current Governor of the Bank of Israel. Prior to serving as Governor, Yaron served as Professor of Banking and Finance at the Wharton School, University of Pennsylvania.
Early life
Amir Yaron was born in Israel in 1964. He grew up in Ramat Hasharon and Ramat Gan, and studied at the Ussishkin School. His father Yaakov was an economist who worked at Bank Hapoalim, and later served in a number of senior management positions in Israeli industry. He then took a position at the World Bank, where he specialized in emerging economies. As a result of this position, the family moved to the United States. Yaron’s mother was a teacher and a psychologist.
Between 1985 and 1989, Yaron served in the Israel Defense Forces as an officer under the economic advisor to the IDF Chief of Staff. Due to his family's move to the United States, Yaron was considered a lone soldier. Following his service, he was discharged with the rank of captain. He holds bachelor's and master's degrees in economics from Tel Aviv University, the latter of which he completed with distinction in 1989. He completed a second master's degree from the University of Chicago in 1992, and received a Ph.D. from the University of Chicago in 1994. Yaron’s doctoral thesis was completed under the guidance of Lars Peter Hansen, later the winner of the 2013 Nobel Prize in Economics.
Academic career
Yaron was assistant professor of economics and finance at Carnegie Mellon University from 1994 until 1997. In 1997, he was appointed to the academic staff of The Wharton School at the University of Pennsylvania. In 2004, he was appointed associate professor, and in 2009 he was appointed Robert Morris Professor of Banking and professor of finance. Yaron’s main areas of research are asset pricing, investment, finance, international markets and international business, and macroeconomics. He also served as a research associate at the National Bureau of Economic Research (NBER), where he headed the capital markets and economics group. In addition, Prof. Yaron served as a visiting academic at the Federal Reserve Bank of Philadelphia.
Economic achievements
Yaron is considered one of the world’s leading researchers in financial economics, and is well known for his studies in microfinancing, asset pricing, and investments. He is an expert in the field of finance, and has published articles in leading academic journals in economics and finance. As a lecturer, Yaron worked in the field of international investment and multinational corporations.
On October 28, 2019, Yaron received the Stephen A. Ross Prize in financial economics from the Foundation for the Advancement of Research in Financial Economics (FARFE) for his work on asset pricing. The award-winning study by Prof. Yaron and Prof. Ravi Bansal was published in The Journal of Finance in 2004, when Yaron was a researcher at the University of Pennsylvania. In the study, the authors found a solution to a common phenomenon in economics known as the "Excess Equity Yield Puzzle"—a higher multiyear return on equities than on bonds and a number of other anomalies in the finance and asset pricing literature. In their study, the authors found that changes in yields on equities and on bonds are partly caused by changes in the perception of long-term macroeconomic risks that threaten economic growth, and by changes in economic uncertainty.
In the explanation for the prize, the prize committee wrote that the research makes a fundamental contribution to central questions in asset pricing and in a diverse set of areas in both finance and macroeconomics. Among other things, this paper helped provide an understanding of the situation that led to the Global Financial Crisis in 2008, and laid a solid scientific groundwork for the inclusion of various factors that influence the public’s savings and consumption. Those factors include concerns over global crisis situations such as trade wars, changes in economic policy due to political changes, and global warming. Since the article was published, it has been cited many times in economic studies, scientific publications, and articles, including a document by the Nobel Prize Committee in 2013, which noted that the Bansal-Yaron model had a deep effect on many later studies, including those of that year’s Nobel Prize winner, Lars Peter Hansen.