The paper discusses the theory and methodology supporting the development of the inoperability input-output model (IIM). The IIM is based on Leontief’s input-output model, which characterizes interdependencies among sectors in the economy and analyzes initial disruptions to a set of sectors and the resulting ripple effects. An advantage of building on Leontief’s model is that it is supported by publications of the Bureau of Economic Analysis. Independent computer runs of the IIM can represent the entire nation or sectors within particular U.S. regions. A dynamic extension of the IIM analyzes different temporal frames of recovery and characterizes the required sector adjustments for achieving new production levels. The IIM can systemically prioritize and manage the sectors deemed to be economically critical and also identify those sectors whose continued operability is critical during recovery. A companion paper demonstrates applying the IIM to attacks on electric power and telecommunications.

The 2003 Northeast Blackout revealed vulnerabilities within the US electric power-grid system. With the economy so dependent on electric power for most aspects of life, a power-grid failure can have far-reaching higher-order effects and can impair the operability of other critical infrastructures. An inoperability of the power sector can result from different types of disasters (e.g., accidents, natural catastrophe, or willful attacks). This paper demonstrates the Inoperability Input-Output Model (IIM) to measure the financial and inoperability effects of the Northeast Blackout. The case study uses information from sources such as the US input–output tables and sector-specific reports to quantify losses for specific inoperability levels. The IIM estimated losses of the same magnitude as other published reports; however, with a detailed accounting of all affected economic sectors. Finally, a risk management framework is proposed to extend the IIM's capability for evaluating investment options in terms of their implementation costs and loss-reduction potentials.

The paper discusses case studies of the inoperability input-output model (IIM) for modeling impacts of willful attacks on interdependent sectors. The IIM is a model for assessing sector vulnerabilities using the inoperability and economic loss impact metrics. The case studies focus on high-altitude electromagnetic pulse (HEMP) attack scenarios. HEMP is an intense electromagnetic blast induced from high-elevation nuclear explosions, potentially causing damage to electronic and electrical systems. Parametric and uncertainty analyses are conducted for assessing (1) intensity of initial disruptions, (2) sector recovery characteristics, (3) economic loss reduction policies for critical sectors, and (4) regional scope of an attack. Sectors susceptible to a HEMP attack have been identified, including electric power, electronic equipment, and workforce. Trade-off analyses are performed to analyze the efficacy of resource allocation strategies associated with recovery. Recommendations from this paper include devel...