Inequality, the Great Recession and the weak recovery. A note for European Countries

This paper reviews the analyses of the links between inequality and economic performance and emphasizes the approaches that are more relevant to the European perspective. The study develops the following three lines of thinking: (i) the more traditional debate on the relationship between inequality, globalization and growth in the long run; (ii) the recent debate on the link between income inequality, household debt and macroeconomic risks during the Great Recession; and (iii) an evaluation of the role, if any, of the persistent income concentration (due to fiscal consolidation) on the weak recovery of many European countries.