I am very enthusiastic about the following paper: it brings new ideas and solves a problem that I did not expect to be solvable, namely usable type inference when both polymorphism and subtyping are implicit. (By "usable" here I mean that the inferred types are both compact and principal, while previous work generally had only one of those properties.)

Polymorphism, Subtyping, and Type Inference in MLsub
Stephen Dolan and Alan Mycroft

We present a type system combining subtyping and ML-style parametric polymorphism. Unlike previous work, our system supports type inference and has compact principal types. We demonstrate this system in the minimal language MLsub, which types a strict superset of core ML programs.

This is made possible by keeping a strict separation between the types used to describe inputs and those used to describe outputs, and extending the classical unification algorithm to handle subtyping constraints between these input and output types. Principal types are kept compact by type simplification, which exploits deep connections between subtyping and the algebra of regular languages. An implementation is available online.

The paper is full of interesting ideas. For example, one idea is that adding type variables to the base grammar of types -- instead of defining them by their substitution -- forces us to look at our type systems in ways that are more open to extension with new features. I would recommend looking at this paper even if you are interested in ML and type inference, but not subtyping, or in polymorphism and subtyping, but not type inference, or in subtyping and type inference, but not functional languages.

This paper is also a teaser for the first's author PhD thesis, Algebraic Subtyping. There is also an implementation available.

(If you are looking for interesting work on inference of polymorphism and subtyping in object-oriented languages, I would recommend Getting F-Bounded Polymorphism into Shape by Ben Greenman, Fabian Muehlboeck and Ross Tate, 2014.)