As of the time of this writing, Google does not provide a USB driver (for Windows) for the Nexus 5. The usual link (http://developer.android.com/sdk/win-usb.html) shows Wind
I'm running Windows 7 Ultimate N version and my Nexus 5 showed up with a yellow exclamation mark in Device Manager and none of the solutions here worked.
I verified that the phone reported itself as:
USB\VID_18D1&PID_4EE1
Which doesn't work with the current (v11) of the Google USB driver.
But after enabling Developer Options and USB debugging on the phone it identified itself as:
USB\VID_18D1&PID_4EE2&MI_01
USB\VID_18D1&PID_4EE2&REV_0232&MI_01
Which installs just fine.
So just enable Developer Options on your phone and retry the device install.