Can Density-matrix renormalization group be Applied to two dimensional systems?

In order to extend the density-matrix renormalization-group (DMRG) method to two-dimensional systems, we formulate two alternative methods to prepare the initial states. We find that the number of states that is needed for accurate energy calculations grows exponentially with the linear system size. We also analyze how the states kept in the DMRG method manage to preserve both the intrablock and interblock Hamiltonians, which is the key to the high accuracy of the method. We also prove that the energy calculated on a finite cluster is always a variational upper bound.