This paper examines the relationship between inequality and growth rates using cross-country data. The authors use non-parametric methods to show that the growth rate is an inverted U-shaped function of net changes in inequality: Changes in inequality (in any direction) are associated with reduced growth in the next period. The estimated relationship is robust to variations in control variables and estimation methods. This inverted U-curve is consistent with a simple political economy model, although interpreting this model causally is challenging due to identification problems. The paper also finds a strong negative relationship between changes in inequality and past inequality, and a negative relationship between growth rates and inequality lagged one period, particularly in countries with not very high initial inequality levels. The authors conclude that the non-linearity in the relationship between inequality and growth is sufficient to explain the differences in previous estimates of this relationship.This paper examines the relationship between inequality and growth rates using cross-country data. The authors use non-parametric methods to show that the growth rate is an inverted U-shaped function of net changes in inequality: Changes in inequality (in any direction) are associated with reduced growth in the next period. The estimated relationship is robust to variations in control variables and estimation methods. This inverted U-curve is consistent with a simple political economy model, although interpreting this model causally is challenging due to identification problems. The paper also finds a strong negative relationship between changes in inequality and past inequality, and a negative relationship between growth rates and inequality lagged one period, particularly in countries with not very high initial inequality levels. The authors conclude that the non-linearity in the relationship between inequality and growth is sufficient to explain the differences in previous estimates of this relationship.