Macroeconomic dynamics and forestry sustainability in Ghana: evidence from time series analysis

Joseph Antwi Baafi

Forestry Economics Review, 2026, vol. 8, issue 2, 262-284

Abstract: PurposeThis study examined how macroeconomic variables, such as inflation, relate to forest sustainability in Ghana. It focuses on three issues: inflation's effect on private investment, how investment affects forest resources, and how inflation influences forest outcomes. The research also analyses their dynamic interactions to understand the macroeconomic impacts on the environmental results.Design/methodology/approachThe study uses annual data for Ghana from 1990 to 2024 to examine long-run relationships using Johansen cointegration. Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) are used to estimate effects, correcting for endogeneity and serial correlation. A Vector Error Correction Model (VECM) captures short-run dynamics and reversion to equilibrium, while impulse-response and variance-decomposition analyses examine forestry responses to inflation and private investment shocks.FindingsThe findings confirm stable long-run relationships among private investment, inflation, and forest resources. Real gross domestic product (GDP) significantly promotes private investment, while inflation is positively associated with investment, reflecting broader macroeconomic conditions rather than a direct causal effect. Private investment significantly reduces forest resources across FMOLS and DOLS estimates. Inflation exhibits mixed effects on forest resources, implying indirect transmission through economic conditions. The VECM results show rapid adjustment of private investment to equilibrium, and variance decomposition identifies investment as the main driver of forest resource fluctuations.Research limitations/implicationsThe analysis relies on aggregated national data, which may not capture informal investment activity or regional variations forest resources.Practical implicationsPolicies promoting private investment require stronger environmental regulation and sustainable land-use planning to protect forest resources while supporting long-term economic growth.Originality/valueThe study provides an integrated empirical framework linking macroeconomic conditions, investment behaviour, and environmental outcomes in Ghana.

Keywords: Inflation; Forest resources; Private investment; Fully modified OLS; Dynamic OLS; Real GDP (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/fer/article/8/2/262/140022 ... estry-sustainability (text/html)
https://www.emerald.com/fer/article-pdf/8/2/262/11889549/fer-03-2026-0016en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ferpps:fer-03-2026-0016

DOI: 10.1108/FER-03-2026-0016

Access Statistics for this article

Forestry Economics Review is currently edited by Yali Wen and Xuefeng Mao

More articles in Forestry Economics Review from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().