Nouriel Roubini earned the moniker "Dr Doom" for his bearish assessments of the US economy before the onset of the global financial crisis, but he and other business leaders now say the outlook for the world's advanced economies is much sunnier.
The New York University professor of economics and chairman of Roubini Global Economics said the US, Japan and much of the euro zone were returning to health, although he added threats remained for developed economies.
Prof Roubini predicted there would be no return to quantitative easing in the US when the Federal Reserve's second round of stimulus expires in June.
"There's not going to be a QE3," he said, adding that next year policymakers would start to implement an "exit strategy, in the case of the US".
But Prof Roubini warned US government debts would not be resolved in the near future, predicting political gridlock until 2013.
"The risk that the bond market will snap … is a small risk but a rising one," he said.
Prof Roubini added that the risk of disorderly default or break-up of the euro zone had diminished and a refinancing crisis of the kind suffered by Greece or Ireland was unlikely, but threats still remained for the 17-nation currency bloc.
"The problems are chronic and aren't going to be resolved any time soon," he said.
The S&P 500 Index has gained more than 4 per cent since the start of the year, while the Eurofirst 300 has risen more than 2 per cent.
By contrast, most Middle East markets have recorded substantial declines this year.
Investors said they were sceptical about the extent of market resilience in the face of rising oil prices, and warned that emerging economies could start to encounter turbulence.
Fabrice Cuchet, the global head of alternative investments and an executive committee member at the hedge fund manager Dexia Asset Management, said a "reappraisal of risk" in emerging markets was taking place among investors globally.
That is leading to a flight to quality, and more funds returning to developed markets, Mr Cuchet said.
"What is happening is reminding investors that there are risks, political or otherwise," he said. "Over the last few years, many investors had forgotten that.
"We're favouring a long-short approach to emerging markets. After years of booming markets we think there is going to be more volatility."
Prof Roubini said if political risks could be contained, the potential for many economies in the Middle East would be "significant".
He was joined in his optimism by Sanjeev Agarwala, the group chief financial officer of Al Habtoor Group, a conglomerate based in the UAE, who said many companies had learnt their lessons after the global financial crisis, and were seeking to minimise their reliance on debt.
"The new normal is the abnormal that's being factored out," Mr Agarwala said. "What we're going to see is going back to the old ways of business."