Impact of low interest rates on income inequality: evidence from China

This study examines the effects of low interest rates on income inequality from the micro perspective of Chinese households. Using China Household Finance Survey (CHFS) data from 2011 to 2019, we find that low interest rates widen income inequality through real estate appreciation but narrow it through wage increment, resulting in an overall expansion of income inequality. These findings provide new insights into the impact of low interest rates on income inequality in the context of China's development.