Abstract
A method of calculating the dielectric response in the time-dependent Hartree-Fock approximation using the Wannier representation is described and applied to the optical spectrum of diamond. The local-field effect reduces the prominent peak in the optical absorption spectrum asymmetrically, more severely on the low-energy side. The electron-hole attraction gives rise to the continuum-exciton effect which tends to enhance the prominent peak in a similarly asymmetric fashion. These results are important for the identification of structures in the experimental optical spectrum with electronic interband transitions, and quite generally for calculating dielectric response in a covalent crystal.