Following his studies, Bofinger worked as a staff member to the Council of Economic Experts between 1978 and 1981. From 1984 until 1990, he was an economist at the Bundesbank. Since 1992, Bofinger has been a professor at the University of Würzburg. Between 1997 and 1999, he served as Dean of the university’s Department of Economics. In 1997, he turned down an offer to move to the Ludwig Maximilian University of Munich.

Nominated by Germany’s trade unions, Bofinger succeeded Jürgen Kromphardt as a member of the Council of Economic Experts in 2004. He has in the past oftentimes disagreed with the Council’s conclusions. Between 2012 and 2017, he issued 26 of the Council’s 27 minority votes during that period. For example, he was the only member of the Council to advocate the adoption of a minimum wage in Germany: He argues that a minimum wage of €5 is necessary to prevent "wage dumping" and to ensure that full-time employment provides enough income. He does not think that a minimum wage would have a negative impact on employment.

In 2005, Chancellor Gerhard Schröder proposed that Bofinger should replace Otmar Issing on the Executive Board of the European Central Bank (ECB) the following year; the post instead went to Jürgen Stark. From December 2011 until May 2012, Bofinger served as a member of the Jacques Delors Institute’s Tommaso Padoa-Schioppa group, a high-level expert group to reflect on the reform of the Economic and Monetary Union of the European Union.