This paper examines two propositions about income inequality: first, that inequality is relatively stable within countries; and second, that it varies significantly across countries. Using a new and expanded dataset, the authors find broad support for both. They argue that political economy and capital market imperfection factors explain these variations. The empirical analysis shows that variables such as civil liberties, initial secondary schooling, financial depth, and land distribution are important determinants of inequality. The study uses Gini coefficients to measure inequality across 49 countries from 1947 to 1994. The results show that about 90% of the variance in Gini coefficients is due to cross-country differences, while only a small percentage is due to time trends. Regression analysis reveals significant differences across countries but no significant time trends in 32 countries. In 10 of 17 cases where a trend is significant, the change is small, less than 1% annually. For example, Jamaica's Gini coefficient would only decrease by 0.2 points per year, taking 70 years to align with the average Gini coefficient. The paper also explores determinants of inequality, including political economy and capital market imperfections. It finds support for these ideas, showing that political freedom, initial schooling, and financial market development are significant determinants of current inequality. The results suggest that the rich can maintain their wealth while the poor face capital market constraints. The study concludes that inequality is determined by factors that vary across countries but are relatively stable within them. The results support the two propositions, showing that Gini coefficients differ significantly across countries and that intertemporal changes are small compared to international differences. The paper also notes that in some countries, inequality can change more quickly, as seen in China. Overall, the findings suggest that inequality is mainly influenced by cross-country differences rather than time trends.This paper examines two propositions about income inequality: first, that inequality is relatively stable within countries; and second, that it varies significantly across countries. Using a new and expanded dataset, the authors find broad support for both. They argue that political economy and capital market imperfection factors explain these variations. The empirical analysis shows that variables such as civil liberties, initial secondary schooling, financial depth, and land distribution are important determinants of inequality. The study uses Gini coefficients to measure inequality across 49 countries from 1947 to 1994. The results show that about 90% of the variance in Gini coefficients is due to cross-country differences, while only a small percentage is due to time trends. Regression analysis reveals significant differences across countries but no significant time trends in 32 countries. In 10 of 17 cases where a trend is significant, the change is small, less than 1% annually. For example, Jamaica's Gini coefficient would only decrease by 0.2 points per year, taking 70 years to align with the average Gini coefficient. The paper also explores determinants of inequality, including political economy and capital market imperfections. It finds support for these ideas, showing that political freedom, initial schooling, and financial market development are significant determinants of current inequality. The results suggest that the rich can maintain their wealth while the poor face capital market constraints. The study concludes that inequality is determined by factors that vary across countries but are relatively stable within them. The results support the two propositions, showing that Gini coefficients differ significantly across countries and that intertemporal changes are small compared to international differences. The paper also notes that in some countries, inequality can change more quickly, as seen in China. Overall, the findings suggest that inequality is mainly influenced by cross-country differences rather than time trends.