Abstract
We have implemented the density matrix expansion (DME) of Negele and Vautherin to calculate molecular exchange energies and compared the results with other existing functionals. We also present a generalized DME which allows expansions of the density matrix in different coordinate systems and use this generalized DME to derive new exchange functionals which give much better results. In particular, based on these developments we propose a new exchange functional which adds a correction term that depends on ▽2 ρ to the local-density approximation.