XQuery allows recursion. For some approach (e.g., algebraic ones), it is
hard to suport this fully. Some examples of functions I recently wrote:

declare function product($seq as xs:decimal*) as xs:decimal
{
   if (count($seq) gt 0)
   then exactly-one($seq[1]) * product($seq[position() gt 1])
   else 1.0
};

declare function allCombinations($wlists as element(wlist)*) as element(wlist)*
{
   let $cnt := count($wlists)
   return
      if ($cnt eq 0) then ()
      else if ($cnt eq 1)
           then for $x in $wlists/child::w return <wlist>{$x}</wlist>
           else let $y := exactly-one($wlists[1])
                   ,$ys := $wlists[position() gt 1]
                   ,$as := allCombinations($ys)
                return
                   for $x in $y/child::w, $a in $as
                   return
                      <wlist>{$x}{$a/child::w}</wlist>
};

Recursion usually 'follows' the XML hierarchy (by descending into an XML
tree), the order in sequences, some diminishing computation, or a
combination thereof. Mutual recursion, etc. all are possible in XQuery.