A generating functional formalism is developed to facilitate the derivation of coarse-grained dynamics of macroscopically relevant variables in various types of many-body problems. The relevant variables can be found either by using symmetry analysis of the action or experimental data. The outcome of the coarse-graining process is a set of coupled partial differential equations for the expectation values of the relevant observables. The set of the macroscopically important observables consists typically of conserved variables and order operators, which are related to the broken symmetries of the system. Symmetry breaking (spontaneous or explicit) in the formalism can be dynamically induced by coupling the system to a generalized heat bath.

The nonequilibrium generating functional formalism is applied to coarse-graining of generalized hydrodynamics of macroscopic quantum phenomena such as Bose fluids and superconductors, and finally classical fluids. The method is by no means restricted to fluids, but can be applied to condensed matter problems as well. High density systems are in general more problematic and it remains to be seen if one can come up with more powerful approximation methods within the current formalism in the future.

The generating functional formalism is shown to reproduce in the specific limits the well-known ground state, finite temperature and time-dependent density functional theories in the quantum regime. We enlarge the set of relevant variables to include also non-conserved order-operators and show how to form generalized density functional theories, which can be by construction linked to the phase-transition behaviour of the system. They are extensions of the traditional density functional theories that were not developed to describe phase changes but only facilitated the expression of the system's (free) energy in terms of the conserved density variable (e.g. number density of electrons).

We develop a generalized density functional theory (effective action of the generating functional) for superconductors and superfluids. For superconductors it is shown by simple symmetry analysis that the relevant order parameter is the pair field of two electrons. Coarse-graining out the phononic degrees of freedom is shown to lead to a retarded effective interaction between the electrons. In the local static limit (effective interaction between electrons static) the theory reduces to the time-dependent Ginzburg-Landau theory. Similarly, by symmetry arguments, the order parameter of a weakly interacting Bose fluid is identified and its dynamics in the tree level approximation is shown to follow the Gross-Pitaevskii equation. Higher order corrections can be systematically produced.

Classical molecular dynamics and stochastic cellular automata types of higher level descriptions can be mapped into the same formalism using commonly known techniques. It is also shown how to connect the static and dynamic density functionals to phase-field models (models of critical dynamics), which are commonly used in materials science modelling. A specific example is provided for a liquid-gas-solid system. The phase-field modelling is then applied to the derivation of dynamics of the liquid-gas phase boundaries and triple lines for which a new projection operator technique is developed. We explain in detail how to go from microscopics to macroscopics and relate the effective parameters on each level to each other. For example, we express the macroscopic surface tensions from the phase-field model in terms of the molecular dynamics simulation parameters. We also discuss how to extract the relevant cross-over time and length scales from the theoretical description and relate them to the experimentally measurable ones. It is shown how the coupling of the triple line and the liquid-gas boundary leads to emergence of memory effects. For confined geometry we also derive a new form for the restoring force acting on the contact line. The phase-field model of the liquid-gas-solid system is first discussed without explicit hydrodynamics from the point of view of diffuse mass transfer and then hydrodynamic effects (momentum conservation) are added.

Evolution equations are derived for the mass, momentum and energy densities representing the proper set of macro variables of simple fluids. The derivation is based on a macroscopic Poisson bracket formulation of phase-field dynamics. Navier-Stokes equations are obtained with extra force terms arising from wall-fluid interactions and capillary stresses. It is also shown how the hydrodynamics boundary conditions for stress tensor can be derived from the bulk fields alone in the sharp interface limit. Some mechanisms for generation of the no-slip boundary condition are also hypothesized. These results are important because they show how in general boundary conditions and corrections to them can be derived and how the numerical implementation can benefit from such a formulation of hydrodynamics, where all boundary conditions are expressed in terms of bulk fields alone. Again, these results have wider applicability than the setting where they have been derived.

The advantage of a systematic coarse-graining procedure enables us to clarify the role of the order parameter concept in the phase-field description of one and two component fluids. We also consider different ways of including gravitational effects and apply dimensional analysis to obtain a condition for the onset of capillary turbulence.

Finally, we present some new formalism for stochastic processes, where the relevant field variables are embedded in an environment characterized by quenched disorder. Whenever some lower dimensional (e.g. defect) structures are projected out of the bulk field evolution equations containing either frozen of coarse-graining generated noise fields, a more complicated effective stochastic noise component will appear in the projected equation of motion of the defect. In particular, the effective noise can be long-ranged even if the quenched background disorder is not. Several condensed matter and hydrodynamical examples describing dynamics of interfaces and line-like objects such as polymers and domain wall defects are considered.