Let's use here a bottom-up approach.
How would you go about estimating the impacts of a volcano on an economy such as Iceland
"Let's use here a bottom-up approach."- is it your suggestion? Maybe you could post your ideas here first?
Clue - start with the key factors it can influence - tourism, shutdowns, emigration, costs for the reconstruction, etc
Without giving away too much, you could break it down by 1) Industries impacted 2) % impact on each industry impacted 3) Relative size of industry to Icelandic GDP.
I'm not sure how you would do this from a bottom-up approach...