Hanke's path to economics was not through theory but through markets. Growing up in Atlantic, Iowa, he learned commodity pricing from the inside out — helping his grandfather hedge egg futures on the Chicago Mercantile Exchange before he was a teenager, then opening his own soybean trading account at 14.

At the University of Colorado Boulder, he formalized these instincts into academic economics, earning a B.S. in Business Administration (1964) and then a Ph.D. in Economics (1969). His dissertation — on the impact of water meter installation on municipal water demand — was one of the first rigorous empirical studies in resource economics.

Before finishing his doctorate, he received his first faculty appointment at the Colorado School of Mines (1966), teaching mineral and petroleum economics to engineers and future industry leaders at age 24.

Hanke joined Johns Hopkins in 1969 as an assistant professor in water resource economics. He became associate professor in 1973 and full professor in 1975 — the fastest such progression in Whiting School history.

The 1970s were marked by prolific scholarship: foundational papers on water demand, benefit-cost analysis, and environmental valuation. He also ventured beyond the academy — conducting fieldwork in Kenya with the legendary paleoanthropologist Richard Leakey in 1972, studying the economics of wildlife conservation.

His first government advisory role came in 1976-77, as a member of the Maryland Governor's Council of Economic Advisers.

In 1981, he was called to Washington as a Senior Economist on President Reagan's Council of Economic Advisers — the first of many turns at the highest levels of government.

The pivot point came in 1983, when Hong Kong reinstated its currency board after a currency crisis. Hanke, working with Sir Alan Walters (Margaret Thatcher's personal economic adviser), co-founded the currency board research program at Johns Hopkins. Together they produced over 20 books and monographs and 300+ articles on currency boards.

What followed was an extraordinary run of real-world implementations:

• 1991: Argentina — Convertibility Law ends hyperinflation
• 1992: Estonia — Kroon replaces ruble via currency board (with Schuler and Jonung)
• 1994: Lithuania — State Counselor, currency board implemented
• 1997: Bulgaria — Chief Adviser to President Stoyanov; 242%/month hyperinflation ends immediately; Hanke becomes "Father of the Bulgarian Currency Board"
• 1998: Indonesia — Adviser to President Suharto during Asian financial crisis
• 1999–2003: Montenegro — State Counselor; Yugoslav dinar replaced with Deutsche Mark

In parallel, Hanke co-founded the Institute for Applied Economics at Hopkins (1995) and, as President of Toronto Trust Argentina, ran what became the world's best-performing emerging market mutual fund in 1995.

After the currency board era, Hanke turned his attention to comprehensive scholarship on hyperinflation. His 2008 work on Zimbabwe — estimating a peak inflation rate of 7.96 × 10¹⁰% in November 2008 using purchasing-power-parity methodology based on black-market exchange rates — was a landmark.

In 2012, co-authoring "World Hyperinflations" with Nicholas Krus, he documented 56 episodes of hyperinflation in history (later expanded to 62 in the Hanke-Krus Table). The paper revealed previously undocumented episodes in Danzig (1923), North Korea (2011), and Iran (2012).

In 2013, he founded the Troubled Currencies Project at the Cato Institute, providing real-time inflation estimates for countries with unreliable official statistics.

In 2020, the Republic of Bulgaria named him a Knight of the Order of the Flag — a formal recognition of his transformative role in Bulgarian monetary history.

Hanke's most recent phase has been characterized by ambitious synthesis and reform advocacy. Did Lockdowns Work? (2023, IEA) applied his trademark empirical rigor to COVID-era policy, finding little evidence that lockdowns reduced mortality.

Capital, Interest, and Waiting (2024, Palgrave Macmillan), co-authored with the late Leland B. Yeager, makes major new contributions to capital theory — a field that had been largely dormant since the Cambridge Capital Controversy of the 1960s.

Making Money Work (2025, Wiley), co-authored with Matt Sekerke, presents Hanke's comprehensive reform agenda for the financial system, arguing for rules-based monetary policy, Divisia monetary aggregates, and an end to central-bank discretion.