I disagree. I think swiching between single quote and $$ based on the
content is just too confusing. I would just use $$ in all cases unless
$$ appears in the function (which should be rare), in which case I would
use $quote$ or something generic.
Well, the function definition in CREATE FUNCTION is a string literal like any other. Based on the reasoning above, would you argue for using $$ for every other string literal in the documentation rather than single quotes? If not, then we're not being consistent anyway, so I don't find the argument very convincing.
Why not use whatever quoting mechanism is clearest for a particular example? In some cases that will be single-quotes, in others it will be dollar quoting via $$, and in still others it will be dollar quoting via $tag$
-Neil
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