Java: Static vs inner class [duplicate]

What is the difference between static and non-static nested class?

An inner class, by definition, cannot be static, so I am going to recast your question as "What is the difference between static and non-static nested classes?"

A non-static nested class has full access to the members of the class within which it is nested. A static nested class does not have a reference to a nesting instance, so a static nested class cannot invoke non-static methods or access non-static fields of an instance of the class within which it is nested.

Let's look in the source of wisdom for such questions: Joshua Bloch's Effective Java:

Technically, there is no such thing as a static inner class. According to Effective Java, the correct terminology is a static nested class. A non-static nested class is indeed an inner class, along with anonymous classes and local classes.

And now to quote:

Each instance of a non-static nested class is implicitly associated with an enclosing instance of its containing class... It is possible to invoke methods on the enclosing instance.

A static nested class does not have access to the enclosing instance. It uses less space too.