  Generalized spatial modulation (GSM) uses $N$ antenna elements but fewer
radio frequency (RF) chains ($R$) at the transmitter. Spatial modulation and
spatial multiplexing are special cases of GSM with $R=1$ and $R=N$,
respectively. In GSM, apart from conveying information bits through $R$
modulation symbols, information bits are also conveyed through the indices of
the $R$ active transmit antennas. In this paper, we derive lower and upper
bounds on the the capacity of a ($N,M,R$)-GSM MIMO system, where $M$ is the
number of receive antennas. Further, we propose a computationally efficient GSM
encoding (i.e., bits-to-signal mapping) method and a message passing based
low-complexity detection algorithm suited for large-scale GSM-MIMO systems.
