Tom Wolfe, the essayist, journalist and author of bestselling books including The Electric Kool-Aid Acid Test and Bonfire of the Vanities, has died in New York at the age of 88.

Wolfe died in a Manhattan hospital on Monday, his agent confirmed on Tuesday. He had been hospitalised with an infection.

With his literary flair and habit of placing himself as a character in his nonfiction writing, Wolfe was regarded as one of the pioneers of New Journalism. Works like the 1965 essay collection The Kandy-Kolored Tangerine-Flake Streamline Baby, 1968’s The Electric Kool-Aid Acid Test – a firsthand account of the growing hippy movement, particularly novelist Ken Kesey’s experiments with psychedelic drugs – and 1979’s The Right Stuff – an account of the pilots who would become America’s first astronauts – established Wolfe as the face of a new style of reportage that could be read for pleasure. He even helped define the term New Journalism – with his publication of a 1973 essay collection of the same name, which placed his own writing alongside the likes of Truman Capote, Joan Didion, Gay Talese and Hunter S Thompson.

“He was an incredible writer,” Talese told the Associated Press. “And you couldn’t imitate him. When people tried it was a disaster. They should have gotten a job at a butcher’s shop.”

His gleeful use of punctuation and italics, along with entertaining asides and neologisms that often quickly cemented themselves into the English lexicon, helped Wolfe stand out from other journalists. Pursuing colourful tales of excess and status-seeking with a ruthless eye and freewheeling energy, Wolfe championed what he called “saturation reporting”, where a journalist shadows and observes a subject over a long period of time. “Nothing fuels the imagination more than real facts do,” Wolfe said in a 1999 interview. “As the saying goes, ‘You can’t make this stuff up.’”

Philip Kaufman, who wrote and directed the screen version of The Right Stuff, told the Guardian: “We’ve lost a great American writer. I spent about five years making the film and trying to listen to Tom’s voice, getting that rambunctious, amazing, energetic quality that he had in his journalism. [But] it was beyond that.”

Kaufman said Wolfe was one of the first to see a private screening and immediately wanted to see the film all over again. “He particularly loved the idea of Sam Shepard, as the Chuck Yeager character, on horseback, riding across the high desert and, in a sense, carrying the spirit of the west,” he said.

Wolfe’s iconic sartorial style was almost as famous as his writing: he almost always sported a three-piece white, bespoke suit (he had around 40), a look that he once described as “Neo-pretentious”. The get-up, reminiscent of a southern gentleman, disarmed people, he claimed – it made him look like “a man from Mars, the man who didn’t know anything and was eager to know.”

Born in Virginia in 1930, Wolfe went straight into reportage out of university, beginning at the Springfield Union in Massachusetts. He later left for Washington, then New York, arriving there in 1962 to work for The New York Herald Tribune. He’d never leave, making a home there with his wife Sheila Berger, the former art director of Harper’s Bazaar, and their two children, until his death.

Jonathan Galassi, Wolfe’s editor at his New York publisher Farrar, Strauss, and Giroux in the 1980s and 1990s, a prolific period for the author, called him a reporter-as-mythologizer.

“His characters were all outsized, himself included ... [but] penetrating Tom’s gentlemanly reserve was not something anyone I knew ever managed,” he told the Guardian.

Of Wolfe’s fashion, Galassi added: “Not only his suits but even his socks were bespoke – I always assumed in silent homage to that other ‘disrespecter’ of pomposities, Mark Twain. I always imagined he got dressed to write, because everything he did was a performance.”

After the success of The Kandy-Kolored Tangerine-Flake Streamline Baby in 1965, Wolfe built a career writing about popular culture, politics and American life, particularly how money and prosperity had shaped the country since the second world war. The Electric Kool-Aid Acid Test, regarded by many as the definitive book about the roots and growth of the hippy movement, placed him in the public consciousness as somewhat of an authority on psychedelics – though, he later told the Observer in a 2008 interview that he had never used LSD, despite some gentle encouragement from Kesey (“I thought hard about it for about six seconds,” he claimed).

Taking on what he called “the big challenge” – the novel – Bonfire of the Vanities was published in 1987, to huge commercial success. A satirical portrait of greed and money in 1980s New York, the novel followed bond trader Sherman McCoy’s journey from Wall Street to a court in the Bronx, after hitting a black man with his car. His second novel, A Man in Full was also a bestseller, but his success attracted critics; in the New York Review of Books the author Norman Mailer wrote: “Extraordinarily good writing forces one to contemplate the uncomfortable possibility that Tom Wolfe might yet be seen as our best writer. How grateful one can feel then for his failures and his final inability to be great — his absence of truly large compass. There may even be an endemic inability to look into the depth of his characters with more than a consummate journalist’s eye.”

However, Wolfe was well-known for giving as good as he got, engaging in public battle with his most passionate literary critics – namely, Mailer, John Updike, John Irving and Noam Chomsky, who he dubbed “Noam Charisma”. In a 2000 essay titled My Three Stooges, Wolfe took on Mailer, Updike and Irving, writing, “It must gall them a bit that everyone — even them — is talking about me, and nobody is talking about them.”

He also had his fans. “He knows everything,” author Kurt Vonnegut once wrote of Wolfe. “... I wish he had headed the Warren Commission. We might then have caught a glimpse of our nation.”

Eventually the author of 17 books – 13 works of nonfiction and four novels – Wolfe wrote well into his eighties, publishing his last book in 2016: The Kingdom of Speech, a controversial critique of Charles Darwin and Chomsky.

“John Maynard Keynes said the people who are successful are the people with animal spirits who refuse to acknowledge the risks they are taking in the same way that the healthy young man ignores the possibility of death,” Wolfe told the Observer in 2008, when asked about his work ethic. “I’m not a young man, and I do have a pulse, but when it comes to mortality, mostly I choose to ignore the subject.”