Harvey’s economic impact will be like the housing bubble popping, says Austan Goolsbee

Austan Goolsbee, former chairman of the Council of Economic Advisers under the Obama Administration, on Thursday compared the housing market crash, which began in 2007, to the economic damages Hurricane Harvey is set to cause the state of Texas.

“What’s different here than in a lot of these cases is much of the multi-millions of people, a decent fraction of them do not have flood insurance, they are not in a flood zone. So that makes it in some ways like the housing bubble popping. So if you lost your home but the insurance isn’t going to cover it, you could see spending go down pretty substantially on a regional basis,” he told FOX Business’ Ashley Webster on “Risk & Reward.”

According to AccuWeather, the total cost of damages from Hurricane Harvey is estimated to total $190 billion.

“I would right now be surprised if it weren’t the biggest natural disaster in our history, just because so many people live in Houston,” said Goolsbee, who is also an economics professor at the University of Chicago.

The University of Chicago economics professor also discussed how Harvey could impact fuel prices for not only Texas, but the entire country.

“For sure you know there’s going to be a massive regional impact on the GDP of Texas and of the Houston region. The thing we don’t know is for the wider aggregated economy, how much impact and how lasting impact will this have on fuel prices, that’s a key component,” he said.