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Cortical circuits are thought to multiplex firing rate codes with temporal codes that rely on oscillatory network activity, but the circuit mechanisms that combine these coding schemes are unclear. We establish with optogenetic activation of layer II of the medial entorhinal cortex that theta frequency drive to this circuit is sufficient to generate nested gamma frequency oscillations in synaptic activity. These nested gamma oscillations closely resemble activity during spatial exploration, are generated by local feedback inhibition without recurrent excitation, and have clock-like features suitable as reference signals for multiplexing temporal codes within rate-coded grid firing fields. In network models deduced from our data, feedback inhibition supports coexistence of theta-nested gamma oscillations with attractor states that generate grid firing fields. These results indicate that grid cells communicate primarily via inhibitory interneurons. This circuit mechanism enables multiplexing of oscillation-based temporal codes with rate-coded attractor states.
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