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Using a relative version of AuslanderÃ¢??s formula, we give a functorial approach to show that the
bounded derived category of every Artin algebra admits a categorical resolution. This, in particular, implies
that the bounded derived categories of Artin algebras of finite global dimension determine bounded derived
categories of all Artin algebras. Hence, this paper can be considered as a typical application of functor categories,
introduced in representation theory by Auslander (1971), to categorical resolutions.
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