More than 60 years ago Simon Kuznets found an empirical relationship between inequality and economic growth, which developed into the well-known inverted U hypothesis, first published in 1950. This thesis describes the development in 16 municipalities focusing on five variables, in relation to Kuznets inverted U hypothesis. These are population growth, industry structure, mean income, income inequality and poverty. The Norwegian economy has developed from a preindustrial economy with few cities and a small government sector to an economy based on modern service industries, large and populated cities and a sizable government sector. Mean income has increased, and the poverty rate has declined. In addition, this thesis suggest that income inequality declined until the beginning of the 1990s, but after this the trend has been increasing. This gives a relationship between income inequality and economic growth that is more similar to an actual U than the inverted U found by Kuznets. The recent increase in income inequality is likely to be related to a deregulation of financial markets in 1984 and reduced taxes on capital income in 1992. In addition, 1992 was the end of the Norwegian banking crisis, and a turning point in the Norwegian business cycles, after an economic downturn during the previous years. This was also a period of structural change from traditional manufacturing to service industries. Second, a converging trend between municipalities is discussed. The industry structure between municipalities has converged over the period. This convergence was also seen in mean income, and in income inequality before 1990. After 1990, however, income inequality between municipalities diverged.