The economic crisis of Japan1. Introduction===============In just fifty years, Japan has gone from poverty to the highest income levels, from economic insignificance to leadership, from importing technology and capital to 'be a major source of exports. , from the least developed status to the leading economic position after the United States. After being the best performing country in the Organization for Economic Co-operation and Development (OECD) for forty years, Japan has been in economic stagnation since the early 1990s. The recovery of the Japanese economy is of great importance not only for Japan but also for the country's well-being. global economy. Therefore, the question now is: “What happened to Japanese economic supremacy”? To answer the question, my task is to identify the factors and causes that contributed to Japan's economic supremacy and subsequent recession. Furthermore, I will identify the reform processes initiated by the government to address economic difficulties. This article begins with a presentation on Japan's dynamic economy. The following sections introduce the Japanese model and the Japanese management style respectively. Economic crises and reforms will be presented in consecutive sections leading to some conclusions. 2.0 The dynamic economy The rise and decline of the Japanese economy has been an important feature of the world economy over the past decade. In 1945 Japan was completely ruined but became the second largest economy in a period of 50 years. Japan's rise from the devastation of military defeat to the world's second largest economy was based on public investment in more productive areas (Bigsten, 2004, p.10). Specific ingredients of the Japanese model that need reform include the structure of the labor market and industrial relations, financial structures and industrial conglomerates. The structure may have previously given Japan a considerable advantage, but it is very likely that it has now outlived its usefulness (Bigsten, 2004, p.14). The world economy is changing rapidly. To keep up with other leading countries, Japan must be able to adapt more quickly than before. Japan is trying to increase the flexibility of the economic system through deregulation and market reforms. If the country is successful with these reforms and at the same time manages to maintain the social discipline of the old system, the economy should be able to recover..