In many magneto-optical materials, Faraday rotation is always accompanied by magnetic circular dichroism(MCD, that crystal represents different absorption coefficient of right and left circularly polarization light under magnetic field). In this paper, the theory of (MCD) of magneto-optical materials is introduced. The influence of MCD on polarization dependent optical isolator is analyzed through employing Jones vector and transmission matrix. The analytical formula about the relation of MCD and the insertion loss and isolation ratio of optical isolator is derived. The curve of insertion loss and isolation ratio with respect to MCD demonstrated that MCD degrades much isolation ratio comparing with insertion loss. It is evident from the curve the effect of MCD on isolation ration is general small, but in order to make increase in the isolation as high as possible and the insertion loss as small as possible, crystal with minimum MCD coefficient and maximum rotation coefficient should be chosen. The conclusion is significant to optical isolator optimization designing.
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