We describe a Wick ordered functional renormalization group method for interacting Fermi systems, where the effective low-energy action is generated from the bare action of the microscopic model by a differential flow equation. We apply this renormalization group approach to a prototypical two-dimensional lattice electron system, the Hubbard model on a square lattice. The flow equation for the effective interactions is evaluated numerically on 1-loop level. The effective interactions diverge at a finite energy scale which is exponentially small for small bare interactions. To analyze the nature of the instabilities signaled by the diverging interactions, the flow of the singlet superconducting susceptibilities for various pairing symmetries and also charge and spin density susceptibilities are computed. This and similar RG calculations by others conclusively establish the existence of d-wave superconductivity in the Hubbard model.
The functional renormalization group is an ideal tool for dealing with the diversity of energy scales and competition of correlations in interacting Fermi systems. Starting point is an exact hierarchy of flow equations which yields the gradual evolution from a microscopic model Hamiltonian to the effective action as a function of a continuously decreasing energy cutoff. Suitable truncations of the hierarchy have recently led to powerful new approximation schemes. I review applications of the functional renormalization group to the two-dimensional Hubbard model and to one-dimensional Luttinger liquids with impurities.