This paper examines the relationship between economic growth and regional income inequality from a spatial economic point of view. The role of space in measuring inequality is discussed and a new theoretical model related to inequality with economic growth is proposed. The proposed model expands the Mankiw – Romer – Weil specification spatially by including regional income inequality as a determinant of economic growth. The measure of inequality is proposed as covariance in the model inferred by the spatial decay of the Gini index. An empirical analysis focusing on the NUTS-2 regions of the European Union was performed to illustrate the model.