Leontief-Based Model of Risk in Complex Interconnected Infrastructures

Abstract

Wassily Leontief received the 1973 Nobel Price in Economics for developing what came to be known as the Leontief input-output model of the economy. Leontief's model enables understanding the interconnectedness among the various sectors of an economy and forecasting the effect on one segment of a change in another. A Leontief-based infrastructure input-output model is developed here to enable an accounting of the intraconnectedness within each critical infrastructure as well as the interconnectedness among them. The linear input/output model is then generalized into a generic risk model with the former as the first-order approximation. A preliminary study of the dynamics of risk of inoperability is discussed, using a Leontief-based dynamic model. Several examples are presented to illustrate the theory and its applications.