According to a new book by an MIT economist argues that the efficient market hypothesis is “incomplete and inadequate” when it comes to valuations, says an article appearing last month in Barron’s.

In his book, titled Adaptive Market, Financial Evolution at the Speed of Thought, behavioral finance authority Andrew Lo argues that market forces other than investor buying and selling behavior (based on corporate earnings profits) — such as increased demand from retirement funds– can drive stock valuations over the long term.

“Over the long run,” says Lo in a recent interview with MarketWatch, “markets are looking pretty good, because there is a large number of pension funds with huge asset pools that need to deploy their capital in ways that would allow them to earn a reasonable rate of return given the liabilities they are facing.”

While Lo recognizes that market declines can occur despite heavy flows into retirement funds (citing 2008 as an example), he argues that “any negative information that puts downward pressure on stocks must resist the tidal wave of retirement investing by institutions with their own set of imperatives.”