  Motivated by applications in quantum chemistry and solid state physics, we
apply general results from approximation theory and matrix analysis to the
study of the decay properties of spectral projectors associated with large and
sparse Hermitian matrices. Our theory leads to a rigorous proof of the
exponential off-diagonal decay ("nearsightedness") for the density matrix of
gapped systems at zero electronic temperature in both orthogonal and
non-orthogonal representations, thus providing a firm theoretical basis for the
possibility of linear scaling methods in electronic structure calculations for
non-metallic systems. We further discuss the case of density matrices for
metallic systems at positive electronic temperature. A few other possible
applications are also discussed.
