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After some trial and error I came to the conclusion that VS Code does NOT install the TypeScript compiler.
The TypeScript compiler does have to be manually installed using npm install -g typescript.
If installing under Windows on a machine that has had Visual Studio 2012/2013/2015 installed, the machine may also have other versions of TypeScript installed here: C:\Program Files (x86)\Microsoft SDKs\TypeScript\
If that is the case, VS Code may try to use the version installed there. To prevent this, remove any references to the above TypeScript path from the environment path variable.
To check the default version of the TypeScript compiler that will be found, use the command line and type: tsc -v. This should give you the version number.
I ran across this issue while attempting to build some TypeScript in Visual Studio Code while following along in @DeborahK's Pluralsight course "Angular with TypeScript".
I came across the same error message in the Visual Studio Code OUTPUT panel.
'tsc' is not recognized as an internal or external command, operable program or batch file.
I had recently done a global installation of TypeScript 1.8.9 from npm.
npm install -g typescript
However, checking the TypeScript compiler version in my cmd shell would show an older version, 1.3.0.
$ tsc -v
To get around this, I removed references from the "Path" variable in my "System variables" (Advanced system settings > Environment Variables... > System variables). I removed the following path:
C:\Program Files (x86)\Microsoft SDKs\TypeScript\1.1\
I learned that the Visual Studio 2013 installation I also had on the same machine included an installation of TypeScript 1.3.0. Cleaning my "Path" variable fixed the output on my TypeScript compiler version check.
Sadly, I still had the issue in Visual Studio Code. The thing that inevitably fixed it for me was a reboot.
If you got this far down in the thread, that's what fixed it for me. YMMV.
