Considerable insight has recently been gained into the dynamics of continental-shelf circulation through a simplification of the governing equations, resulting in a parabolic equation for the pressure field. Solutions of this equation appear to model realistically important flow phenomena, notably the effects of winds and coastal geography in setting up half-open coastal circulation cells, and an associated trapped pressure field. Circulation cells should be established mainly on the inner shelf, according to theory, i.e. within about 30 km of the coast, and should be important agents of mass exchange. In the present paper the theory of shelf circulation is reviewed with an emphasis on its most general predictions. Then the question is examined of how a considerable body of evidence on coastal sea-level variations in response to wind, longshore sea-level gradients, longshore and cross-shore currents can be interpreted in the theoretical framework.