Long term income inequality changes outweigh short term wealth inequality

“2021 Annual Economic Report,” Bank for International Settlements, June 2021, https://www.bis.org/publ/arpdf/ar2021e.pdf

Similarly, sustaining a recovery in the aftermath of a severe economic recession requires keeping interest rates low for longer, especially if they are constrained by the effective lower bound.18 For example, had monetary policy refrained from deploying all necessary tools to keep borrowing costs low in the aftermath of the GFC and the Covid-19 pandemic, the recessions would have been deeper and longer. This, in turn, would have exposed the most disadvantaged to longer unemployment spells and worsened income inequality.19 That said, while low interest rates mitigate income inequality substantially, their impact on asset prices, especially equities, may have the side effect of increasing wealth inequality in the near term. This outcome, however, is not a given and may be overturned for certain measures of inequality if home ownership is concentrated in the middle of the wealth distribution (Box II.C).