Income distribution,economic growth and European integration

In this paper I discuss recent theories on the relationship between growth and inequality, and ask whether the two move together or not. Output growth can be due to increases in physical capital, human capital, employment or the level of technology, and I argue that each of these represents a mechanism that relates our two variables of interest. The European integration process has represented a major policy change that has affected not only the opportunities for growth but also the constraints faced by national governments. We can then ask whether such integration has had an effect on inequality, and to what extent it has resulted in a conflict between productive efficiency and distributive considerations.