In Europe and in the United States one of  the  legacies of the economic and financial crisis will no doubt be a high and particularly worrying economic inequality. Inequality has roots that go well beyond the 2008 collapse, but the stagnation that has followed it has made disparities in income and wealth more serious and more difficult to eradicate. Actually, the challenge of high inequality – in particular in European countries and the United States - has attracted a large attention, with important studies – such as those by Stiglitz (2012) and Piketty (2013) – and growing policy concerns by international institutions such as the OECD (2008,2011,2015) and the IMF (Ostry et al., 2014; Dabla-Norris et al.,2015). However, a convincing understanding of the mechanisms at the roots of inequality is still lacking and a reduction of disparities in income and wealth is still far from being a priority in governments’ agenda. In this article – and in our book (Franzini and Pianta, 2016) – we suggest an interpretation of inequality that is parsimonious enough to identify the fundamental mechanisms at work, capable to account for its complexity and, at the same time, adequate for identifying appropriate policy measures.