This paper examines the global dynamics of income inequality, focusing on the interaction of inequalities within and between countries. Using data from the World Inequality Database, the World Bank, and the United Nations, the analysis reveals that global income disparities remain high, despite recent improvements driven by the economic growth in emerging economies. The paper introduces and applies the Rich-to-Poor Ratio (RTP) as a refined metric for assessing extreme income gaps. The findings demonstrate a strong and statistically significant correlation between within-country inequality and between-country inequality, particularly at higher levels of development, forming a U-shaped relationship. This co-movement is not monotonic, suggesting that countries with lower external gaps may converge further to the advanced top only at the expense of greater internal income inequalities. Overall, the results highlight the need for a holistic approach to inequality that addresses both national and global dimensions.
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