He was born in Atlanta, Georgia of Iranian descent  and grew up in Radnor, Pennsylvania. He attended Upper Merion High School. Zandi received B.S. and Ph.D. degrees in economics from the University of Pennsylvania. His surname of “Zandi” comes from the Zand dynasty (formally known as the Zandieh dynasty), which ruled southern and central Iran (1750–1794) in the eighteenth century.
Zandi’s analysis of the impact of an economic stimulus package on the US economy was cited by Christina Romer and Jared Bernstein in their report on President Barack Obama‘s proposed American Recovery and Reinvestment Plan. Zandi uses old-style Keynesian models in the spirit of Nobel Prize winner Lawrence Klein. The utility of such models to gauge the impact of fiscal stimulus has been questioned by Harvard economist Robert J. Barro.