In recent years, there has been increasing debate about the low economic
growth and the risk of secular stagnation in economically advanced countries. Some
authors point out possible links between secular stagnation and income inequality,
causally in both directions. Taking as a reference point the theoretical literature on the
relationship between economic growth and income distribution, this study examines the
extent to which different levels of economic growth are associated with the income class
structure in European countries between 1993 and 2016, focusing on income distribution
before taxes and transfers (market incomes). We highlight that in recession periods the
size and income share of the middle class decrease, while the opposite occurs in periods
with strong economic growth rates. Nevertheless, when growth rates are modest the
patterns are much less clearly defined. Some policy and institutional implications are
discussed in order to tackle the concerns of secular stagnation and inequality
simultaneously.