I’m at a Columbia conference on that topic, giving a talk tonight; my slides are here (pdf). My basic point is that we need to get beyond reduced-form correlations between inequality and growth, and a few samples of things we might do.
I’m actually a skeptic on the inequality-is-bad-for-performance proposition — not hard line against it, but worried that the evidence for some popular stories is weaker than I’d like. It’s important to realize that even the absence of a relationship is a big change from conventional wisdom; but how much do we really know for the opposite case?