HJM

I need a better intuition of the HJM framework. I understand that it is different from equilibrium models in that it takes the entire forward curve as given to price interest-rate derivatives. But I'm not really sure of the implementation aspects, like how to incorporate randomness such that we get level and steepness effects. You can introduce two brownian motions to do that, but how?

I can embed simple equilibrium models into the HJM framework mechanically, i.e. following the steps in standard texts (which is just tedious calculus and algebra). But I can't really see how this is done in practice.

Exam is one day away. This is by far the most interesting module. Have been trying to solve the problem sets and I have to say I enjoy doing them. Various scenarious, various approaches. And everything boils down to the FTAP, and either using PDE or Feynman-Kac to solve. But it's those little tricks to begin with that eludes you. Will have a horrid time during the 3-hour exam. Not sure if I can finish all 4 problems.