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We analyze how bounded rationality affects the determinacy properties of forecast-based interest-rate rules in a behavioral New Keynesian model with limited asset market participation (LAMP). We show that the conventional wisdom for achieving equilibrium uniqueness under rational expectations – adherence to the Taylor principle with low/moderate LAMP, while adopting a passive policy under high LAMP – does not carry over to more realistic frameworks with myopic agents. Under moderate participation rates, the combination of myopia and LAMP have a destabilizing effect on the economy by helping to induce indeterminacy under the Taylor principle. In contrast, myopia plays a key stabilizing role in high LAMP economies, where a passive policy is no longer required to prevent indeterminacy, and determinacy under the Taylor principle can be restored. We investigate the sensitivity of our results to a policy response to output; alternative forms of bounded rationality; and the inclusion of a cost-channel of monetary policy.