Abstract
Both theoretical and experimental evidence indicate that synaptic excitation and inhibition in the cerebral cortex are well-balanced during the resting state and sensory processing. Here, we briefly summarize the evidence for how neural circuits are adjusted to achieve this balance. Then, we discuss how such excitatory and inhibitory balance shapes stimulus representation and information propagation, two basic functions of neural coding. We also point out the benefit of adopting such a balance during neural coding. We conclude that excitatory and inhibitory balance may be a fundamental mechanism underlying efficient coding.