Index: polemy/eval.d
==================================================================
--- polemy/eval.d
+++ polemy/eval.d
@@ -128,19 +128,19 @@
 		(LayeredExpression e)
 		{
 			if( e.lay == "@macro" )
 				return macroEval(e.expr, ctx, false);
 			else
-				return eval(e.expr, ctx, false, e.lay);
+				return eval(e.expr, ctx, true, e.lay);
 		},
 		(LetExpression e)
 		{
 			// for letrec, we need this, but should avoid overwriting????
 			// ctx.set(e.var, "@v", new UndefinedValue, e.pos);
-			Value v = eval(e.init, ctx, true, lay);
 			if(splitCtx)
 				ctx = new Table(ctx, Table.Kind.NotPropagateSet);
+			Value v = eval(e.init, ctx, true, lay);
 			ctx.set(e.var, (e.layer.length ? e.layer : lay), v, e.pos);
 			return eval(e.expr, ctx, false, lay);
 		},
 		(FuncallExpression e)
 		{
@@ -381,6 +381,12 @@
 }
 
 unittest
 {
 	assert_eq( evalString(`@@t = fun(x){x+1}; @t(123)`).val, new IntValue(BigInt(124)) );
+	// there was a bug that declaration in the first line of function definition
+	// cannot be recursive
+	assert_nothrow( evalString(`def foo() {
+  def bar(y) { if(y<1) {0} else {bar(0)} };
+  bar(1)
+}; foo()`) );
 }

ADDED   sample/macro.pmy
Index: sample/macro.pmy
==================================================================
--- sample/macro.pmy
+++ sample/macro.pmy
@@ -0,0 +1,57 @@
+@macro twice(x) { x; x };
+@macro max(x,y) {
+  var _x = x; # no hygenic macro btw....
+  var _y = y; # no hygenic macro btw....
+  if(_x<_y){_y}else{_x}
+};
+def maxNormal(x,y) {
+  if(x<y){y}else{x}
+};
+@macro maxBad(x,y) {
+  if(x<y){y}else{x}
+};
+
+@macro LetItBe(x, y) {
+  let it = x in y
+};
+
+@macro pow10(x) {
+  @v(
+    def pow(x, n) {
+      if( n == 1 ) { x }
+      else {
+        @macro( @v(x) * @v(pow(x,n-1)) )
+      }
+    }
+    in
+      pow(@macro(x),10)
+  )
+};
+
+def printAndReturn(x)
+{
+	print(x);
+	x
+};
+
+
+
+
+
+def main()
+{
+	twice( print("foo") );
+	print("--------------");
+	print(max(printAndReturn(100),printAndReturn(200)));
+	print("--------------");
+	print(maxNormal(printAndReturn(100),printAndReturn(200)));
+	print("--------------");
+	print(maxBad(printAndReturn(100),printAndReturn(200)));
+	print("--------------");
+	print( LetItBe( 1+2+3, it*it ) );
+	print("--------------");
+	print(pow10(2));
+	
+};
+
+main()