At the very latest by the end of the sixties, generative grammarians began to concern themselves with the nature of language change. Their basic attitude was that change involved rules which change in an entire system. Take for example the Germanic sound shift again. The generativists maintain that this consisted of a rule change, namely [+continuant] > [-continuant] for all voiceless stops. This type of interpretation has at least two advantages: 1) it shows that the change was a relatively small step (and thus more plausible as small changes are more likely than large ones) and 2) it covers a whole range of segments — plosives — stressing at the same time the common features between them.
Another instance of a sound change which can be described very elegantly within a generative framework is the development of Auslautverhärtung in German. This is seen as simple rule addition: all obstruents (plosives and fricatives, but not sonorants) change from [+voiced] to [-voiced] in syllable-final position.
Generative grammar strives to account for many instances of language change. For this it developed the idea of markedness. A marked element in a language is one which is statistically rare in the languages of the world. Examples of marked elements are the fricatives [θ] and [ð] in English or the front rounded vowels in German, [y] and [ø]. Consider the latter to begin with. These arose due to a rule addition in Germanic phonology: all back vowels became front vowels — [-front] > [+front] — when they were followed by a high front vowel, e.g. *sconi > schön. This covers all cases (/y/, /ø/ and /ɛ/) and incidentally explains why forms such as Buch : Böcher cannot occur in German.
Not only that, generative grammar can also account for the later loss of umlaut in English. Given that front rounded vowels are marked, there is a natural tendency for them to disappear in the world’s languages. Thus in the course of Middle English these vowels were lost, developing to their non- rounded counterparts by the simple change of a feature [+rounded] to [-rounded].
Yet another point should be made here: markedness can explain the occurrence of certain sounds in child language acquisition: marked elements turn up very much later in a child’s developing language. Thus voiced final stops and fricatives in English only arise after their voiceless counterparts in keeping with the marked nature of these segments; this also gives a reason for their development in adult language in the history of German (and of the Slavic languages as well).
A classic study of historical linguistics within the generative paradigm is the following:
A recent and entirely up-to-date treatment of grammatical change from a generative point of view is this book which is suitable for student course work.
Designed for the advanced student and for linguists is the following investigation into principles of syntactic change.
Outside the framework of generative grammar but nonetheless theoretically aware is the following study.