Born in Germany in 1895, Erwin Graue attended high school in Bremerhaven, Germany and emigrated to the United States in 1918. After finishing his bachelor's degree in economics from Cornell University in 1923, he accepted a position as an industrial statistician in New York City, where he worked until 1925. While working in New York, he continued his studies at the New School of Social Research while collaborating with economists at the University of Chicago. Graue returned to Cornell to complete his doctorate in economics in 1928, and then began work as an assistant professor of economics in the School of Business at the University of Idaho. He married Mount Holyoke graduate Sarah Louise Baker in 1929.

Dr. Graue spent a year lecturing in economics at the University of Ankara, Turkey, as a Fulbright Fellow in 1951. From 1954 to 1965, he directed the Public Utilities Executives' Course, conducted each summer at the University of Idaho. During his 37-year career at the University of Idaho, Graue received teaching honors and wrote numerous articles in several scholarly journals. Many of his students went on to hold top positions in businesses and corporations in Idaho and elsewhere. Graue specialized in economic statistics, business, and agricultural economics.

Upon his retirement from the University of Idaho in 1965, Graue accepted a teaching position in Gonzaga University's economics department, where he taught until 1986. At both the University of Idaho and Gonzaga University, Graue earned a reputation as an outstanding teacher and faculty member. He continued to correspond with former students long after they left his classroom. Graue's letters to his students serving in the armed forces during World War II offered them cheer and news of the University of Idaho, to which they eagerly responded. Erwin Graue died on April 21, 1994, at the age of ninety-nine.