Abstract
This work is concerned with the formulation and testing of a self-consistent nonlinear response theory of optical processes based upon the density functional formalism. An expression is developed for the third order susceptibility of a spherically symmetric system using a generalization of a time-dependent local density approximation (TDLDA) previously developed for linear response. Explicit calculations of the coefficient of third harmonic generation for the rare gases are in good agreement with experiment. Applications to other nonlinear phenomena are pointed out.