Numerous correlated electron systems exhibit a strongly scale-dependent behavior. Upon lowering the energy scale, collective phenomena, bound states, and new effective degrees of freedom emerge. Typical examples include (i) competing magnetic, charge, and pairing instabilities in two-dimensional electron systems, (ii) the interplay of electronic excitations and order parameter fluctuations near thermal and quantum phase transitions in metals, (iii) correlation effects such as Luttinger liquid behavior and the Kondo effect showing up in linear and non-equilibrium transport through quantum wires and quantum dots. The functional renormalization group is a flexible and unbiased tool for dealing with such scale-dependent behavior. Its starting point is an exact functional flow equation, which yields the gradual evolution from a microscopic model action to the final effective action as a function of a continuously decreasing energy scale. Expanding in powers of the fields one obtains an exact hierarchy of flow equations for vertex functions. Truncations of this hierarchy have led to powerful new approximation schemes. This review is a comprehensive introduction to the functional renormalization group method for interacting Fermi systems. We present a self-contained derivation of the exact flow equations and describe frequently used truncation schemes. Reviewing selected applications we then show how approximations based on the functional renormalization group can be fruitfully used to improve our understanding of correlated fermion systems.

We consider extended Hubbard models with repulsive interactions on a honeycomb lattice, and the transitions from the semimetal to Mott insulating phases at half-filling. Because of the frustrated nature of the second-neighbor interactions, topological Mott phases displaying the quantum Hall and the quantum spin Hall effects are found for spinless and spin fermion models, respectively. The mean-field phase diagram is presented and the fluctuations are treated within the random phase approximation. Renormalization group analysis shows that these states can be favored over the topologically trivial Mott insulating states.

We study the renormalization group flow of the interactions in the two-dimensional t-t ′ Hubbard model near half filling in a N -patch representation of the whole Fermi surface. Starting from weak to intermediate couplings the flows are to strong coupling with different character depending on the choice of parameters. In a large parameter region elastic Umklapp scatterings drive an instability which on parts of the Fermi surface exhibits the key signatures of an insulating spin liquid (ISL), as proposed by Furukawa et al., rather than a conventional symmetry-broken state. The ISL is characterized by both strong d-wave pairing and antiferromagnetic correlations, however it is insulating due to the vanishing local charge compressibility and a spin liquid because of the spin gap arising from the pairing correlations. We find that the ISL is a consequence of a Fermi surface close to the saddle points at the Brillouin zone boundaries which provides an intrinsic and mutually reinforcing coupling between pairing and Umklapp channels.

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We investigate the fermionic SU(N) Hubbard model on the two-dimensional square lattice for weak to moderate interactions using renormalization group and mean-field methods. For the repulsive case U>0 at half filling and small N the dominant tendency is towards breaking of the SU(N) symmetry. For N>6 staggered flux order takes over as the dominant instability, in agreement with the large-N limit. Away from half filling for N=3 two flavors remain half filled by cannibalizing the third flavor. For U<0 and odd N a full Fermi surface coexists with a superconductor. These results may be relevant to future experiments with cold fermionic atoms in optical lattices.