A considerable number of recent experimental and computational studies suggest that subtle impairments of excitatory to inhibitory balance or regulation are involved in many neurological and psychiatric conditions. The current paper aims to relate, specifically and quantitatively, excitatory to inhibitory imbalance with psychotic symptoms in schizophrenia. Considering that the brain constructs hierarchical causal models of the external world, we show that the failure to maintain the excitatory to inhibitory balance results in hallucinations as well as in the formation and subsequent consolidation of delusional beliefs. Indeed, the consequence of excitatory to inhibitory imbalance in a hierarchical neural network is equated to a pathological form of causal inference called 'circular belief propagation'. In circular belief propagation, bottom-up sensory information and top-down predictions are reverberated, i.e. prior beliefs are misinterpreted as sensory observations and vice versa. As a result, these predictions are counted multiple times. Circular inference explains the emergence of erroneous percepts, the patient's overconfidence when facing probabilistic choices, the learning of 'unshakable' causal relationships between unrelated events and a paradoxical immunity to perceptual illusions, which are all known to be associated with schizophrenia.
Keywords: Bayesian; belief; delusions; hallucinations; network; predictive coding.