Lambda-lifting and lambda-dropping respectively transform a block-structured functional program into recursive equations and vice versa. Lambda-lifting was developed in the early 80's, whereas lambda-dropping is more recent. Both are split into an analysis and a transformation. Published work, however, has only concentrated on the analysis parts. We focus here on the transformation parts and more precisely on their correctness, which appears never to have been proven. To this end, we define extensional versions of lambda-lifting and lambda-dropping and establish their correctness with respect to a least fixed-point semantics.
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