Favorably scaling numerical time-dependent many-electron techniques such as time-dependent density functional theory (TDDFT) with adiabatic exchange-correlation potentials typically fail in capturing highly correlated electron dynamics. We propose a method based on natural orbitals, i.e., the eigenfunctions of the one-body reduced density matrix, that is almost as inexpensive numerically as adiabatic TDDFT, but which is capable of describing correlated phenomena such as doubly excited states, autoionization, Fano profiles in the photoelectron spectra, and strong-field ionization in general. Equations of motion (EOMs) for natural orbitals and their occupation numbers have been derived earlier. We show that by using renormalized natural orbitals (RNOs) both can be combined into one equation governed by a hermitian effective Hamiltonian. We specialize on the two-electron spin-singlet system, known as being a ``worst case'' testing ground for TDDFT, and employ the widely used, numerically exactly solvable, one-dimensional helium model atom (in a laser field) to benchmark our approach. The solution of the full, nonlinear EOMs for the RNOs is plagued by instabilities, and resorting to linear response is not an option for the ultimate goal to study nonperturbative dynamics in intense laser fields. We therefore make two rather bold approximations: we employ the initial-state-``frozen'' effective RNO Hamiltonian for the time propagation and truncate the number of RNOs to only two per spin. Surprisingly, it turns out that even with these strong approximations we obtain a highly accurate ground state, reproduce doubly excited states, and autoionization.
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