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We investigate the effect of exchange and correlation (xc) on the plasmonspectrum and the Coulomb drag between spatially separated low-densitytwo-dimensional electron layers. We adopt a new approach, which employs dynamicxc kernels in the calculation of the bi-layer plasmon spectra and of theplasmon-mediated drag, and static many-body local field factors in thecalculation of the particle-hole contribution to the drag. The spectrum ofbi-layer plasmons and the drag resistivity are calculated in a broad range oftemperatures taking into account both intra- and inter-layer correlationeffects. We observe that both plasmon modes are strongly affected by xccorrections. After the inclusion of the complex dynamic xc kernels, a decreaseof the electron density induces shifts of the plasmon branches in oppositedirections. And this is in stark contrast to the tendency obtained within theRPA that both optical and acoustical plasmons move away from the boundary ofthe particle-hole continuum with a decrease in the electron density. We findthat the introduction of xc corrections results in a significant enhancement ofthe transresistivity and qualitative changes in its temperature dependence. Inparticular, the large high-temperature plasmon peak that is present in therandom phase approximation is found to disappear when the xc corrections areincluded. Our numerical results at low temperatures are in good agreement withthe results of recent experiments by M. Kellogg {\it et al.}, Solid StateCommun. \textbf{123}, 515 (2002).

Exchange and correlation effects on plasmon dispersions and Coulomb drag in low-density electron bilayers