Physical origin of giant excitonic and magneto-optical responses in two-dimensional ferromagnetic insulators

The recent discovery of magnetism in atomically thin layers of van der Waals crystals has created great opportunities for exploring light-matter interactions and magneto-optical phenomena in the two-dimensional limit. Optical and magneto-optical experiments have provided insights into these topics, revealing strong magnetic circular dichroism and giant Kerr signals in atomically thin ferromagnetic insulators. However, the nature of the giant magneto-optical responses and their microscopic mechanism remain unclear. Here, by performing first-principles GW and Bethe-Salpeter equation calculations, we show that excitonic effects dominate the optical and magneto-optical responses in the prototypical two-dimensional ferromagnetic insulator, CrI$_3$. We simulate the Kerr and Faraday effects in realistic experimental setups, and based on which we predict the sensitive frequency- and substrate-dependence of magneto-optical responses. These findings provide physical understanding of the phenomena as well as potential design principles for engineering magneto-optical and optoelectronic devices using two-dimensional magnets.