Progress in the theory of magnetic reconnection in the solar corona is reviewed. In particular, the following topics are discussed in detail: (i) the eruptive behavior of a highly sheared magnetic arcade configuration with formation and ejection of plasmoids-a possible model for solar flares. (ii) the heating of the coronal plasma by dissipation of spontaneously formed current sheets and by turbulent reconnection leading to Taylor's (1986) relaxation.
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