This paper explores two propositions regarding income inequality: (1) income inequality is relatively stable within countries, and (2) it varies significantly among countries. Using a new and expanded dataset on inequality, the authors conduct statistical tests and empirical analyses to support these propositions. The analysis reveals that about 90% of the total variance in Gini coefficients can be attributed to differences across countries, while only a small percentage is due to variation over time. Key variables associated with political economy arguments (political freedom and initial secondary schooling) and capital market imperfections (initial asset distribution and financial market development) are found to be significant determinants of current inequality. The results suggest that inequality is determined by factors that differ substantially across countries but tend to be relatively stable within countries. The paper also discusses the robustness of these findings through sensitivity analysis and links the results to previous work on the relationship between growth and inequality.This paper explores two propositions regarding income inequality: (1) income inequality is relatively stable within countries, and (2) it varies significantly among countries. Using a new and expanded dataset on inequality, the authors conduct statistical tests and empirical analyses to support these propositions. The analysis reveals that about 90% of the total variance in Gini coefficients can be attributed to differences across countries, while only a small percentage is due to variation over time. Key variables associated with political economy arguments (political freedom and initial secondary schooling) and capital market imperfections (initial asset distribution and financial market development) are found to be significant determinants of current inequality. The results suggest that inequality is determined by factors that differ substantially across countries but tend to be relatively stable within countries. The paper also discusses the robustness of these findings through sensitivity analysis and links the results to previous work on the relationship between growth and inequality.