We present a neural mass model of steady-state membrane potentials measured with local field potentials or electroencephalography in the frequency domain. This model is an extended version of previous dynamic causal models for investigating event-related potentials in the time-domain. In this paper, we augment the previous formulation with parameters that mediate spike-rate adaptation and recurrent intrinsic inhibitory connections. We then use linear systems analysis to show how the model's spectral response changes with its neurophysiological parameters. We demonstrate that much of the interesting behaviour depends on the non-linearity which couples mean membrane potential to mean spiking rate. This non-linearity is analogous, at the population level, to the firing rate–input curves often used to characterize single-cell responses. This function depends on the model's gain and adaptation currents which, neurobiologically, are influenced by the activity of modulatory neurotransmitters. The key contribution of this paper is to show how neuromodulatory effects can be modelled by adding adaptation currents to a simple phenomenological model of EEG. Critically, we show that these effects are expressed in a systematic way in the spectral density of EEG recordings. Inversion of the model, given such non-invasive recordings, should allow one to quantify pharmacologically induced changes in adaptation currents. In short, this work establishes a forward or generative model of electrophysiological recordings for psychopharmacological studies.