[GHC] #16322: "deriving newtype instance" generates an infinite loop

[GHC]

#16322: "deriving newtype instance" generates an infinite loop
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        Reporter:  paf31             |                Owner:  (none)
            Type:  bug               |               Status:  infoneeded
        Priority:  normal            |            Milestone:
       Component:  Compiler          |              Version:  8.6.3
      Resolution:                    |             Keywords:
Operating System:  Unknown/Multiple  |         Architecture:
                                     |  Unknown/Multiple
 Type of failure:  None/Unknown      |            Test Case:
      Blocked By:                    |             Blocking:
 Related Tickets:                    |  Differential Rev(s):
       Wiki Page:                    |
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Comment (by paf31):

 I understand that only the last argument is coerced, but even so, that
 would require an instance for `C (X String a) b`, which in this specific
 case instantiates to `C (X String Int) Int`, and the functional dependency
 should (I think) force this to fail via `X String Int ~ Int`. No?

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Ticket URL: <http://ghc.haskell.org/trac/ghc/ticket/16322#comment:5>
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