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JSPES, Vol. 41, No. 2 (Summer 2016)
pp. 31–56

Did Income Inequality Benefit or Hinder Economic Growth in Europe?

Sergio A. Berumen

Department of Applied Economics
Faculty of Law and Social Sciences
King Juan Carlos University, Madrid, Spain

In the last decade, a large number of research studies have been published on the inequality of income and economic growth; however; there is still not agreement about the former’s effect on the latter, nor the type of underlying causation between the two. The purpose of this study is to respond to the question: Does income inequality benefit or hinder economic growth in Europe? The empirical research focuses on 12 European countries from 1975 to 2009. The conclusion is that non-extreme inequality can benefit economic growth.