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Increased reliance on the Internet for critical infrastructure and the global nature of supply chains provides an opportunity for adversaries to leverage dependencies and gain access to vital infrastructure. Traditional approaches to assessing risk in the cyber domain, including estimation of impacts, fall short due to uncertainty in how interconnected systems react to cyber attack. This paper describes a method to represent the pathways of disruption propagation, evaluate the macroeconomic impact of cyber threats and aid in selecting among various cybersecurity policies. Based on state of the art agent-based modeling, multicriteria decision analysis, and macroeconomic modeling tools, this framework provides dynamic macroeconomic, demographic and fiscal insights regarding shocks caused by cyber attacks to the regional economy over time. The interlinkage of these models will provide a robust and adaptive system that allows policy makers to evaluate complex issues such as cybersecurity threats and their impacts on the geopolitical, social, environmental, and macroeconomic landscape. [ABSTRACT FROM AUTHOR]

The REAcct (for Regional Economic Accounting) tool was developed for estimating order-of-magnitude economic impacts within DHS scenario analysis. REAcct uses input-output modeling, geo-spatial data computational tools, and publically available economic data and allows for detailed specification of sectors, regions, and disruption intervals. Direct impacts are estimated as changes in output and employment; total (direct plus indirect) impacts are calculated using regional total and final demand multipliers. In total, the REAcct framework and software allow for scenario analysts to understand and assess the interdependent relationships between critical infrastructures, economic industries, and consumers that are essential to broader homeland security scenario analysis. [ABSTRACT FROM AUTHOR]

Over the past 10 years, the National Infrastructure Simulation and Analysis Center (NISAC) has conducted over 150 detailed multi-hazard, multi-infrastructure scenario analyses of a wide range of man-made and natural disasters. Using a model-based implementation of the Department of Homeland Security risk management framework, NISAC analyzes scenarios ranging from extreme-event situational awareness to long-term strategic policy for improved homeland security and resilience to these events. This article describes the essential elements of the NISAC scenario analysis process, the toolkit of subject-matter expertise and models used, with a particular focus on the economics component. An example set of Hurricane Katrina economic-analysis results is used to illustrate basic elements of NISAC economics scenario analysis. [ABSTRACT FROM AUTHOR]

Many models of Nash Equilibrium are complex enough that it becomes difficult to ascertain if and under what conditions the economic players can find and maintain this equilibrium. Using an analytical overlapping- generations model of goods, labor, and banking markets and quasi-rational discrete choice decision making, we find through agent-based simulations that Nash Equilibrium in goods market prices is stable when firms are sufficiently sensitive to changes in profits. In addition to verifying the analytical Nash outcome, the simulations verify that their economic agents, decision rules, and other protocols correspond to and maintain consistency with the analytical theory and identify important bounds of the analytical model. [ABSTRACT FROM AUTHOR]