Eurosystem central banks can stimulate the economy beyond the policy rate by increasing the size of its balance sheet, however the effects are short-lived, according to a European Central Bank paper, published on Tuesday.

Gert Peersman, the paper's author, uses a structural vector auto-regression model to examine the macroeconomic effects of traditional interest rate innovations and unconventional monetary policy actions on the eurozone economy. The author notes that little is known about the