Pulse Amplitude Modulation (PAM)
Sampling allow us to represent real world continuous signal, such as audio or video, in a format suitable for digital processing and storage. This sampled discrete-time signal is inherently digital. A digital signal is a discrete-time signal that is further quantized in amplitude.
Pulse Amplitude modulation (PAM) is the modulation technique in which amplitude of carrier pulses is made to vary in accordance with the input message signal, similar to Amplitude Modulation (AM). But here we use pulse generator as carrier signal. So, Pulse–amplitude modulation (PAM) is a form of signal modulation where the message information is encoded in the amplitude of a series of signal pulses.
The basic idea in PAM for communication over a Continuous Time (CT) channel is to transmit a sequence of Continuous Time pulses of some per-specified pulse shape, with the sequence of pulse amplitudes carrying the information.
Pulse Amplitude Demodulation
To demodulate a PAM signal, pass it through a reconstruction filter. As here, the amplitude of the pulse carrier is varied according to the amplitude of the message signal, we only need to pass this received pulse signal through a low-pass filter with a cut-off frequency the same as the message signal or slightly higher.
If you perform quantization at the transmitter side and assign some levels (amplitude levels), then demodulation is performed by detecting the amplitude level of the carrier at every single period. The number of possible pulse amplitudes in analog PAM is theoretically infinite. Digital PAM reduces the number of pulse amplitudes to some power of two. For example, in 4-level PAM there are (2^2 = 4) possible discrete pulse amplitudes; in 8-level PAM there are (2^3 = 8) possible discrete pulse amplitudes; and in 16-level PAM there are (2^4 = 16) possible discrete pulse amplitudes.