When I dream it seems that the (subjective) time is slower than the objectively passed time as seen on my clock radio. Is this because neurones fire collectively at a faster rate, so you can "put an hour of dream time in a minute of objective time"? If they fire at a faster rate, then this does not mean that you perceive the events in your dream as going faster, as you adapt to your experience of time in the real world.
In REM sleep, the EEG is remarkably similar to that of the awake state (Purves et al., 2001). Although the EEG represents the synchronized activity of many neurons in the cortex, it does give us a clue whether they are firing faster or not.
Wakefulness is mainly dominated by beta and gamma waves (source: Scholarpedia), i.e. 12 - 100 Hz. REM sleep is characterized by low-amplitude mixed-frequency brain waves, quite similar to those experienced during the waking state - theta waves, alpha waves and even the high frequency beta waves more typical of high-level active concentration and thinking, i.e. 4-30 Hz (table 1) (source: Sleep).
Table 1. EEG bands. source: Neurosky
So if anything, I would say REM sleep, being largely devoid of the gamma band, is associated with slightly lower-frequency oscillations and hence lower neural activity overall.
Is this because neurons fire collectively at a faster rate, so you can "put an hour of dream time in a minute of objective time"?
I believe it has more to do with what information becomes available to the association cortex and ncc (or consciousness) in the waking/sleep brain.
In the waking brain the neocortex is connected to the environment, so things tend to progress smoothly and for the most part we have contextual references to measure the passing of time,in sleep there is a varying degree of a disconnect both internal and external culminating in REM sleep, where thalamocortical connections (a switchboard/router for the senses) are at it's lowest, so cut off from the environment an cues, the thalamus- neocortex interplay stimulates only neocortical areas ( presumably those recently active through interplay with the hippocampus ) which in turn activate related areas through plasticity. So you could be in one scene where the only measurement of time is internal followed by another one without, the passage of time thus becomes hard to gauge. 1
The firing rate specifically as it pertains to cycles I believe is a wrong measure to focus on, for one, even in the waking gamma ( 30 >htz ) we top at something like 24 fps comprehending a scene and it takes about 200ms to bind information2,there is little to no information ( although if I am wrong please point it out), that we increase our comprehension and perception rates as information presents itself faster, rather we drop frames, and so even at a faster rate the information available to consciousness in the sleeping or waking brain seems to be capped.
Notes, reference & sources:
1. An excellent and readable overview of dream and it's data components is : The Secret World of Sleep (Lewis).
2. Rhythms of the brain (buzsaki) deals in depth with EEG measurements as they relate to information exchange in the brain. In search of consciousness (Koch)looks at the binding problem and ncc in detail.