The Hull-White model is one of the most widely used interest rate derivative pricing models in the financial industry. It was developed in 1990 by John Hull and Alan White, and is part of a larger class of stochastic interest rate models known as affine term structure models.

Hull-White model is an interest rate derivative pricing model that makes the assumption that very short-term rates are normally distributed and revert to the mean. This model sets itself apart from other interest rate models by looking at the entire yield curve when calculating the price of a derivative security, instead of using only a single rate from the yield curve.

The model uses a two-factor model of the instantaneous forward rate that relates the path of spot rates to the mean reverting behavior of the short rate. The two-factor model is composed of a drift term and a volatility term, both of which must be estimated from market prices for given maturities. The drift and volatility terms are used to compute the expected terminal rate, which then provides the basis for computing the price of the security.

The Hull-White model has become popular among both academics and practitioners due to its simplicity and flexibility. It is easily solvable, and allows for the modeling of heavy tail effects in the short rate. The model can also be easily extended to incorporate more complicated forward rate structures, such as those with convexity bias and stochastic volatility.

The Hull-White model is a powerful tool for pricing and hedging interest rate derivatives. Its flexibility and ease of use make it a favorite among practitioners, and its theoretical underpinnings have made it a vital part of academic research as well. Its combination of theoretical and practical qualities has led to its widespread use in the financial industry, and it is expected to remain a key tool for dealing with interest rate derivatives for the foreseeable future.