Rectifiers can increase the effective voltage of AC. Or decrease it. No magic involved.
See also:
Electricity 101 (Part 1): What does “16 V AC” Mean? What is Effective Voltage?
Electricity 101 (Part 2): What Does Nominal Voltage Mean?
Rectifiers can be used to reduce the effective voltage of AC. Rectifiers with capacitors can be used to increase the effective voltage of AC.
Reducing the effective voltage with rectifiers
AC (as discussed here) is a sine wave with a positive half and a negative half. By using a diode (simple rectifier), one can filter out the negative half and let the positive halt pass through – or vice versa. Doing this with “16 V AC” will reduce the effective voltage to 8 V – no longer AC, but pulsating DC. The effective voltage was reduced to 8 V, but we still have one half of a sine wave with a peak voltage of about 22 V (see part 1).
The effective voltage is reduced, but the peak voltage remains high. The rectified voltage will be appropriate for some consumers, but not for all.
Increasing the effective voltage with rectifier and capacitor
Use a rectifier (a single diode or a bridge rectifier will do) and a capacitor to increase the effective voltage. With 16 V AC, the capacitor will be charged with about 22 V DC. The effective voltage can be anywhere between 8 V and 22 V with a simple rectifier and anywhere between 16 V and 22 V for a bridge rectifier, depending on the load and the capacity of the capacitor.
Modern digital controllers work like that and will give about 22 V track voltage when operated on 16 V AC.
Warning
A simple rectifier can reduce the effective voltage from 16 V to 8 V. A simple rectifier with a capacitor will raise the effective voltage to 22 V.
Reducing the effective voltage with a rectifier will not work if you connect a consumer that includes a rectifier and a capacitor (most decoders have that). So do not use the rectifier trick to feed consumers with unknown electronics on board.
Doubling the voltage with a rectifier
Starting from 16 V AC, you can use a simple rectifier (diode) to charge a capacitor with 22 V from the positive half. Use another diode the other way around to charge another capacitor to -22 V. This will give up to 44 V.
This circuit is known as a bridge voltage doubler or a Delon voltage doubler. This is what happens inside a CU 6020 or 6021, a Delta Control or a booster 6015 or 6017. By using the bridge voltage doubler, these devices allow to have a common ground (brown) between the transformer in the input side and the track output. But because of the voltage doubler technique, these devices require AC and cannot be used with DC power supplies.
See also:
Electricity 101 (Part 4): Blue Transformers and Modern Decoders